MALAYSIA —New Hoong Fatt Holdings Berhad, through its wholly-owned unit Jhi Soon Manufacturing Industries Sdn. Bhd., has committed up to RM20 million to subscribe to Class A Redeemable Preference Shares in Cypress Drive Ventures Sdn. Bhd., a venture capital fund vehicle. The fund targets high-growth startups and is managed by registered venture firm Cypress Asia Sdn. Bhd., led by industry veterans Dr. Sivapalan Vivekarajah and Ms. Xelia Tong How Yin. New Hoong Fatt Holdings Berhad is a Malaysia-based investment holding company principally engaged in manufacturing and distributing automotive replacement body parts.
The move marks a strategic capital allocation shift for the automotive manufacturer, allowing it to diversify revenue streams and gain direct exposure to emerging business models without diverting focus from its core manufacturing operations. Managed over an initial seven-year period, the venture fund intends to build a concentrated portfolio of five to seven growth-stage companies. The deal structure includes robust governance safeguards, granting the corporate investor two seats on the four-member investment committee and requiring its affirmative vote for investment approvals.
This transaction reflects a broader trend of traditional manufacturing enterprises leveraging corporate venture capital to hedge against technological disruption and access innovation ecosystems. By deploying internal funds into early-stage ventures, corporate investors can identify complementary technology trends and innovative solutions while maintaining complete operational separation from core industrial units.
For institutional decision-makers and investors, the vehicle offers structured downside mitigation through a priority distribution framework and liquidation preference rights. The progressive capital call arrangement limits immediate cash flow impact while providing long-term upside exposure to capital appreciation across growth-stage enterprises.
