KWAP Invests in Corporate Perpetual Sukuk
Kumpulan Wang Persaraan (KWAP), a Malaysian pension fund, has subscribed in the first tranche of Malaysian Airline System in the 2.5 billion ringgit sukuk. KWAP invested 1 billion ringgit and is the initial subscriber. A sukuk is essentially an Islamic bond. The government of Malaysia is working hard to make the country a major center of sukuk financing.
This sukuk-programme is the world’s first corporate perpetual sukuk. It is a debt/equity hybrid.
The rest of the sukuk subscribers are based in Malaysia. Maybank Investment Bank was the principal advisor, sole lead manager, and lead arranger.
KWAP seeks to achieve a nominal risk adjusted return of 8% per year over a five year rolling period. The fund invests in both active and passive investment strategies. They also utilize external fund managers when necessary.