London-based data provider Dealogic was quoted by London-based financial daily Financial Times (FT) as saying that the value of outbound M&A in those regions have risen by 20 per cent so far this year, from US$21.7 billion (RM70 billion) in 2012 to US$26.1 billion.
In comparison, the value was a close US$29.9 billion back in 2007, before all activities dissipated resulting from the banking crisis then.
“It’s basically these big pension funds diversifying their portfolios,” Victoria Barbary, director at Institutional Investor’s Sovereign Wealth Centre in London, told the FT.
“A lot of these type of companies are very ambitious about going regional or international. That’s the theme we’ve been sensing for the last 12 months,” said Singapore-based Tay Ee-Ching, JPMorgan’s head of mergers and acquisitions for southeast Asia.
According to FT, most of the top ten investments were in the fields of oil and gas, chemicals and property.
Dealogic named the EPF, Malaysia’s private sector retirement fund, as one of the big spenders after it splashed out US$1.2 billion on a recent acquisition with a consortium that also included American hedge fund manager Och-Ziff Capital Management.
In February, the EPF, the world’s sixth-largest pension fund, was reported to have acquired 12 out of 38 private hospitals owned by the Spire Healthcare Group across the United Kingdom, marking its entry into the UK’s private healthcare market.
This follows EPF’s involvement in the iconic £8 billion (RM40 billion) Battersea Power Station refurbishment project in another consortium that also included SP Setia Bhd and Sime Darby Bhd.
The FT report also named local conglomerate YTL Corporation, which bought UK’s regional water and sewage operator Wessex Water for £1.24 billion in May 2002, as another Malaysian player in the M&A scene.
A wave of portfolio diversification has seen firms such as local plantation company Felda buying the 198-unit Grand Plaza service apartments in Bayswater, London for £97.9 million.
Previously, the EPF concentrated its investments abroad primarily on the property sector, and only recently began venturing out from the prime locations such as London.
In July, it was reported that EPF is starting a €250 million (RM1.08 billion) fund with current partner Goodman Group Pty Ltd from Australia, to buy seven industrial properties in the German cities of Berlin, Munich and Frankfurt.
Another €250 million will be spent on buying office spaces in Paris, in addition to properties in New York, sources said.
While launching the Battersea project in July, Prime Minister Datuk Seri Najib Razak told the FT that Malaysia would continue to gobble up London property as cash-rich funds such as the Employees Provident Fund “need to take some of that surplus abroad”.
In September, EPF reported a 19.7 per cent increase year-on-year for its investment income in the second of quarter of 2013, with equities making up over 60 per cent of the total RM9.16 billion.
The retirement fund also increased its investment portfolio by 12 per cent to RM554.14 billion as of June.
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