Australian robo-advisor Raiz has signed a joint venture agreement with a subsidiary of Malaysian asset manager Permodalan Nasional Berhad (PNB), according to a statement from the Australian firm.
Raiz will own 70% of Jewel Digital Ventures, which is a wholly-owned subsidiary of PNB Equity Resource Corporation, which, in turn, is wholly owned by PNB. Jewel, which is set up by PNB to spearhead its digital business strategy, will own the remaining 30% of the joint venture.
Under the agreement, Raiz will provide the technology while Jewel will provide the required capital after obtaining a licence in Malaysia.
The next step for both parties is to submit a formal application to the regulator for the licence, according to the statement. Discussions with the regulator are progressing, and both firms expect that a robo platform will go live at the end of the year.
“PNB and its strategic holdings have significant presence in Southeast Asia, which will only benefit Raiz’s efforts to enter these markets,” Tony Fay, Raiz’s chairman, said in the statement.
“With a population of 33 million people, Malaysia represents an excellent opportunity for our business.”
In Malaysia, PNB is one of the largest fund management companies, managing assets of around RM 298.5bn ($71.11bn) across 13.8 million accounts, according to the statement.
Other firms have already launched robo-advisory platforms in Malaysia, including Singapore-based Stashaway and Kuala Lumpur-based Farringdon Group.
Malaysia’s regulators have been active in welcoming robo-advisory firms. In 2017, it introduced the digital investment management (DIM) licence framework, which outlines application details for firms that plan to be involved in “automated discretionary portfolio management services”.
In December, Raiz entered Indonesia, where it secured a licence to distribute mutual funds in the country, according to the statement. The Indonesian business opened in March 2019 and the app is expected to be available by the third quarter.
In Australia, Raiz was launched in 2016 with an AUM of A$320m ($221.25m). Its robo platform enables users to invest either in domestic superannuation accounts or in a portfolio of ASX-listed ETFs.
