Jelawang Capital opens second Emerging Fund Managers cohort, lowers entry bar

Jelawang Capital, the national fund-of-funds vehicle owned by sovereign wealth manager Khazanah Nasional, has opened applications for the second cohort of its Emerging Fund Managers' Programme (EMP), introducing year-round submissions and a lower minimum fund size that signals a faster, smaller-cheque deployment path for Malaysia's institutional VC capital, according to The Edge Malaysia's 16 July 2026 cover story on the programme. It is the clearest signal yet that the country's biggest domestic allocator of VC dry powder is leaning into earlier, more flexible fund formation rather than waiting for established managers to come knocking.

The deal

The second cohort replaces the previous fixed submission window with rolling applications and loosens the entry conditions for pre-seed and seed strategies, according to Khazanah's press release on the opening of the cohort. The first cohort, announced in June 2025, had required applicants to target a minimum fund size of RM60 million and to secure at least 20% of that amount in firm commitments before being considered. Roughly half of the 50 first-round applicants were filtered out at that pre-screening stage, before any due diligence on thesis, team, or governance.

The remaining five managers were selected across two parallel tracks. Under the EMP, three Malaysian-led firms were chosen: Vynn Capital (mobility and supply chain, seed to Series A), Kairous Capital (cross-border technology with China-Southeast Asia corridors), and First Move (pre-seed across the region). Two regional managers came in under the parallel Regional Fund Managers' Initiative (RMI): AppWorks from Taiwan, running Malaysia-focused Web 2.0 and Web 3.0 cohorts, and Granite Asia, the multi-stage investor that counts 115 portfolio unicorns and 61 IPOs globally. As of Jelawang's 24 June 2026 update, around RM200 million of the parent RM1 billion commitment has been earmarked for deployment to these five managers, and the first cohort has already put more than RM60 million into over ten early-stage companies, most of them Malaysian.

Why this matters

For an institutional LP base sitting on elevated regional dry powder, the EMP redesign is a direct response to a known structural problem. Deloitte's Asia-Pacific private equity almanac for 2026 pegs regional PE dry powder at US$21.1 billion (RM89 billion) — down from a US$32.1 billion peak in 2023 but still well above what current deal flow can absorb. Bain's Q1 2026 Southeast Asia PE pulse reported US$9.2 billion deployed across just 19 deals, with three megadeals accounting for roughly 91% of the capital. The picture for VC is similar: DealStreetAsia's Q1 2026 review recorded US$2.81 billion raised across 98 deals region-wide, the lowest quarterly deal count in at least eight years.

Malaysia is the regional outlier by deal count if not by cheque size. The same DealStreetAsia review put the country in second place in Southeast Asia for the first time, with 18 equity deals in Q1 2026 — its highest quarterly tally since Q3 2024. Most were seed and earlier-stage rounds, and a meaningful share flowed through a single accelerator programme rather than headline fund activity. The EMP restructuring is the policy lever being pulled to keep that volume going: lower the entry bar for first-time and second-time managers, accept smaller initial fund sizes, and let deployment begin earlier in each manager's lifecycle.

Budget 2026, tabled in October 2025, has already reinforced the direction. The combined allocation under KWAP's Dana Perintis and Jelawang Capital increased from RM550 million to RM750 million, alongside a 10-year extension of VC tax incentives covering special tax rates for VC firms and dividend-tax exemptions for investors. The Malaysian Venture Capital Roadmap 2024-2030, for which Jelawang serves as secretariat, gives the programme its policy spine. The second EMP cohort is the operational counterpart to all of it.

What's next

The next markers to watch are the first deployment milestones from the second cohort and the pace at which the existing five managers — particularly the regional partners AppWorks and Granite Asia — start announcing Malaysian portfolio companies. Jelawang Managing Director Dato' Amirul Feisal Wan Zahir has said capital calls and deployment are already underway across the first cohort, which means the first real test of whether the RM1 billion of dry powder is converting into investable cheques will land in the next two quarterly DealStreetAsia Malaysia deal reviews.

Source: The Edge Malaysia