JCorp’s strategic asset allocation approach

AS chief investment officer, I often reflect on the weight of investment decisions. These decisions shape the financial health of an organisation and set the strategic direction of a state which relies on strong economic foundations for sustained progress.

At Johor Corp (JCorp), our mandate has never been confined to generating profit alone.

Guided by our purpose of Membina dan Membela, our responsibility is to turn every ringgit deployed and translate into enduring value for Johor.

Meeting that responsibility requires clarity and discipline. As of June 2025, JCorp managed RM25bil in assets across operating companies, land, bank deposits and development projects.

Our Strategic Asset Allocation (SAA) framework provides the structural discipline that keeps this portfolio resilient, diversified and aligned with our long-term purpose. It ensures that capital is placed within a portfolio architecture that delivers both financial strength and long-term impact.

Commitment to solid fundamentals

Fundamental investment criteria remain at the core of JCorp.

Firstly, we continuously seek investments that can yield decent returns to our shareholder – the state of Johor.

Our aim is to maximise return per unit risk within the risk appetite tolerance range approved by our board. This approach seeks to maximise the “Sharpe ratio” and push the “Markowitz efficient frontier”.

Secondly, we strive to lower our cost of capital. Money to serve both financial and societal benefits does not come for free.

The trust that JCorp has built among our key stakeholders –investors, lenders and the authorities has been critical in reducing our cost of financing.

As an example of this trust-building, all our bond offerings are now based on green financing or sustainability-linked financing, demonstrating our commitment to sustainable activities.

As a result, JCorp and its investee companies have been well-evaluated by rating agencies, and our bonds have been priced very competitively against the market, receiving multiple times oversubscription during the bidding stage.

With a lower cost of capital, it opens opportunities to participate in many high-impact projects, including those that are known as patient-capital projects – foundational infrastructure projects with high capital expenditure and long gestation periods – where disciplined structuring and rigorous underwriting standards are essential.

Thirdly, we are always cognisant of our duty to the state. Apart from supporting the state in many high-impact projects, our obligation is to deliver dividends for the state coffers.

This is where investment discipline matters. We are always highly selective and invest with clear objectives, with a dual aim of generating financial benefits and multiplier effects.

Smart strategic investments deliver higher dividends to the state, while creating broader socioeconomic value across Johor.

Balancing commercial strength and catalytic impact

Our portfolio rests on two complementary pillars: commercial investments and catalytic investments.

Commercial investments form the organisation’s financial backbone. These include healthcare, plantations, real estate, and food and restaurants. They generate stable cash flows, predictable returns and market scale.

KPJ Healthcare Bhd operates 30 hospitals nationwide and continues to strengthen Malaysia’s clinical capabilities.

QSR Brands, through KFC and Pizza Hut Malaysia, supports thousands of jobs and contributes to the national food supply chain.

Johor Plantations Group Bhd, one of Malaysia’s largest integrated palm oil players, is expanding downstream and circular-economy initiatives to unlock higher-value markets.

Johor Land Group (JLG) develops strategic real estate and infrastructure that focuses on ecosystem-building to create economic and social value.

Catalytic investments play a different role. They build new industries, strengthen future capabilities and stimulate value chains that benefit Johor in the long run.

Renewable energy is one of these areas. Johor Plantations Group’s biomethane plants convert palm oil mill effluent into renewable energy, demonstrating a model that blends sustainability with economic value creation.

Ibrahim Technopolis or Ibtec reflects another long horizon move.

A next-generation innovation precinct by JLG, it is designed to attract investors, talent and high-value activities. Though still in early development, its potential to shape Johor’s economic trajectory is significant.

These two pillars allow us to deliver commercial strength while enabling broader socioeconomic progress. This balance is intentional and central to how we create lasting value.

A disciplined framework for a volatile world

Public investment institutions and development organisations worldwide are rethinking how capital can support long-term resilience.

Many are aligning investment decisions with national priorities such as climate readiness, emerging industries and sustainable development.

For JCorp, capital is a strategic tool.

Our SAA discipline helps us stay resilient through volatile cycles while positioning the organisation to pursue future-oriented opportunities.

Every investment is assessed through both financial fundamentals and long-term societal impact.

Social return on investment is considered alongside conventional metrics such as internal rate of return and net present value.

This ensures that decisions remain anchored in financial prudence while capturing broader long-term value for Johor.

Looking to the horizon

As a portfolio builder and venture creator, we continuously scan the horizon for shifts in industries, technologies and behaviours. Our task is to place capital where it can strengthen Johor’s economy, create future jobs and build industries with long-term relevance.

This calls for deliberate risk-taking guided by data, strategy and purpose within the guardrails of our SAA. It also requires a commitment to leave a stronger organisation for the next generation.

JCorp aims to ensure every investment decision is supported by rigorous analysis, disciplined structuring and a clear line of sight to long-term value.

Every investment must reflect the organisation’s vision, responsibility and legacy, and not focused on financial metrics alone.

Our ultimate goal is to build a legacy of enduring benefit for Johor, aligned with the spirit of Membina dan Membela.

Shamsul Anuar Abd Majid is the chief investment officer of Johor Corp. The views expressed here are the writer’s own.