Malaysia’s Armed Forces Fund Board is preparing to enter the private credit market for the first time and is eyeing returns that are in the “high single digits” from the asset class.
Ahmad Farouk, chief investment officer of the fund, locally known as Lembaga Tabung Angkatan Tentera (LTAT), disclosed the plan during a panel discussion at Asia Asset Management’s 14th Annual Malaysia Roundtable on May 5.
He said the fund, which managed more than 13 billion ringgit (US$3.29 billion) of assets as of end-2025, is now searching for external managers to build its private credit allocation starting from zero.
“…We’ve already done the engagement with our governance bodies, so I think they are halfway there, what we are studying now is manager selection, so we should be getting there very soon,” he said.
He said LTAT is not chasing aggressive returns and prefers more defensive structures with capital preservation features. “We are going to be looking for safe investments, safe security investments, something that can give us in the region of high single digits [percentage return].”
According to Farouk, the fund is cautious about overly aggressive lending practices in private credit, particularly those involving small and mid-sized enterprises. “We don’t want to be out there killing them.”
He said many borrowers turning to private credit markets are firms that cannot obtain loans from traditional banks, and that institutional investors have a responsibility to support their business growth.
