Finding Opportunities Where Few Dare To Invest

Khmer Times | 08 Feb 2015
By Cam McGrath

Douglas Clayton, CEO and managing director of Leopard Capital, at his office in Phnom Penh. (KT Photo: Jonathan Pannetier)

In 2008, Leopard Capital launched Cambodia’s first private equity fund. Now, as the eight-year fund approaches its expiry date, the frontier markets investment firm is looking for exit options. Douglas Clayton, CEO and managing director of Leopard Capital, spoke to Khmer Times about the risks and rewards of being a first-mover in a frontier market, and of the opportunities he sees in a country that is still off the radar of most institutional investors.

KT: You were a pioneer investment firm in Cambodia. What was the market like when you first arrived and what led you to open a private equity fund here?

Clayton: I first came to Cambodia in 1991 as a tourist and saw Angkor Wat, which was as the UN [peacekeeping mission] was coming in. Sixteen years later I ended up moving my family here and setting up a fund because I felt if a country could change that much in 16 years, what about the next 16? I felt it had already done the hardest thing, which is to take itself from a dusty, frontier town sort of place to a one where I could safely move my family and set up a business. So I’m a believer in the long term.

Leopard Haiti Fund invests in Veerhouse Voda Haiti S.A.

Leopard Capital - Press Release | 15 July 2014

Port-au-Prince, Haiti – Leopard Capital announced today that it has provided USD 1,750,000 to Veerhouse Voda Haiti S.A., a manufacturer of eco-friendly, disaster-resilient buildings in Haiti. Veerhouse Voda’s competitively priced building solutions combine lightweight steel frames, expanded polystyrene (EPS) walls, and a patented mortar mix. This system produces a permanent structure highly resistant to earthquakes, hurricanes, fires, and floods, and naturally insulated from the tropical heat.

Leopard Capital’s investment in Veerhouse Voda will be made through Leopard Haiti Fund (“LHF”), and is in the form of a debt instrument with participation features. The investment will finance Veerhouse Voda’s establishment of a local factory in Haiti that will enable the company to improve its efficiency, cut its costs, fulfill orders quicker, and create jobs in a country with 60% unemployment.

Veerhouse Voda’s new factory will produce pre-engineered residential and commercial buildings as well as EPS products for the local market. The new factory and business expansion is projected to create over 80 direct and 2,000 indirect new jobs.

Leopard Cambodia Fund Seeking Buyer for Kingdom Breweries

Leopard Capital - Press Release | 09 June 2014

Phnom Penh, Cambodia – Leopard Capital LP announced today that Leopard Cambodia Fund LP (“LCF”) – Cambodia’s first private equity fund – is putting its controlling interest in Kingdom Breweries (“Kingdom”) up for sale. 

 As a fund with an eight-year lifespan, LCF is required to exit all of its investments before it expires in April 2016. Since its inception in 2008, Leopard Cambodia Fund LP has made 13 investments in Cambodia, Laos, and Thailand and has achieved three full and four partial exits. The sale process of Kingdom is a continuation of LCF’s requirement to exit all of its investments before the Fund’s expiration date.

LCF is seeking a strategic investor that is committed to financing and developing Kingdom through its next stage of growth. Kingdom is positioned to capitalize on Cambodia’s rising disposable income levels and growing middle class, particularly as regional trade increases ahead of the 2015 ASEAN Economic Community integration.

Leopard Haiti Fund invests in NUtv

Leopard Capital - Press Release | 28 April 2014

Port-au-Prince, Haiti – Leopard Capital announced it has invested USD 2,500,000 to become a minority equity shareholder in Digital Satellite Systems, the owner and operator of one of Haiti’s leading pay television services, “NUtv”. Leopard Capital’s investment in NUtv will be made through Leopard Haiti Fund LP (“LHF”). LHF’s investment will help NUtv enhance its existing network and expand its coverage to many areas in Haiti that cannot currently access a broad range of television programs.

The broader rollout of NUtv in Haiti will support Haiti’s transition from analog to digital television, a step in bridging the digital divide.  NUtv uses the latest-generation digital broadcasting standard, DVB-T2, which originated in Europe and is becoming increasingly popular around the world.  

Opportunistic Private Equity, Leopard Capital In Asia's Frontier Markets

Forbes | January 19, 2014
By Jon Springer

Ken Stevens has been working in market research and investments for 23 years in Southeast Asia. Previously head of research and an investment banker at CLSA Securities in Thailand, he cofounded Leopard Capital in 2007 to be a premier global private equity company in frontier markets. He has a range of expertise in financial management, project design, service businesses and property construction and management.

In this interview we focus on Leopard’s strategy for identifying quality private equity investment environments, and investment opportunities in private equity and real estate assets in emerging Asia. We also discuss themes to watch in Asia’s growth story going forward. Countries specifically addressed in particular questions include Cambodia, Sri Lanka, Myanmar, Mongolia, Vietnam and Bangladesh.

Ripe for Growth

By Ben Yue in Hong Kong | June 21, 2013
PDF version

Cambodia is booming, and its flourishing economy is being fueled by investment from Chinese state-owned and private companies.

When planeloads of Chinese tourists land in Siem Reap to visit the world famous Angkor Wat temple complex, they could be forgiven for thinking they’re still in China despite having had their passports stamped. The motorized rickshaws known as tuk-tuks they take might have been donated by the government of Hubei province, the de rigueur Smile of Angkor Wat dance performance might have been operated by the Yunnan Media Industrial Investment Holding Group and, of course, there are the Chinese hawkers in the night markets.

Besides, the Chinese yuan is the second most commonly used foreign currency in the country after the US dollar, circulating widely among local guides and convenience stores.

About 333,900 Chinese tourists visited Cambodia in 2012, up 35 percent year-on-year and predicted to reach 1 million in 2020, according to Cambodia’s Ministry of Tourism.

To Succeed in Myanmar, Find Solid Local Partners

By Kenneth Stevens | June 04, 2013

Over the past 18 months, I have witnessed a growing flood of foreign investors, businesspeople and trade missions pouring into Myanmar to seek their fortunes in the last great frontier economy of Asia. At this week’s World Economic Forum in the capital of Naypitaw, foreign visitors will meet with Myanmar’s best and brightest in the hope of finding local partners to help them realize these ambitions.

Most of these visitors are aware of the basic challenges of investing in Myanmar: significant corruption; untested legal systems; inadequate infrastructure; underdeveloped human resources and other issues. At Leonard Capital, we note that early investors in other emerging countries such as Cambodia and Laos faced similar limitations, but managed to mitigate these risks and make successful investments. From our experience in all these countries, the top challenge for investors in Myanmar will be finding reliable business partners who will properly align their interests with those of the foreign partner.

Leopard Capital Wins “Frontier Markets Investment Manager of the Year” Award in Acquisition International’s 2013 M&A Awards

Leopard Capital - Press Release | May 30, 2013



Leopard Capital LP has been named “Frontier Markets Investment Manager of the Year” in Acquisition International’s 2013 M&A Awards.
The firm also won three additional awards in this year’s competition: “Private Equity House of the Year – Cambodia” for the second consecutive year, “Fund of the Year – Cambodia”, and “Boutique Private Equity House of the Year – Haiti”.

The annual Acquisition International M&A Awards recognize the leading professionals in the tax, start-up advisory, hedge fund, private equity, venture capital, and real estate industries. A record number of votes were received in 2013 and winners were determined based on the total number of votes and in-house research. Acquisition International is the definitive magazine for venture capital, corporate finance advisers, and top tier management and it provides complete international coverage of M&A transactions, combined with industry expertise and sector analysis.

dloHaiti Taps VC Funding as it Brings Haiti Clean Water and Jobs

The Wall Street Journal | May 14, 2013

By Lora Kolodny

A “for-profit, for-good” startup, dloHaiti, raised $3.4 million in Series A funding to bring clean, affordable water and new jobs to communities across Haiti, according to the company’s chief executive and founder, Jim Chu.

Investors in dloHaiti’s Series A round included firms that focus on social ventures: LeopardCapital, IFC InfraVentures (an investment arm of the World Bank Group) and Netherlands Development Finance (FMO), along with Miyamoto International.

Pronounced like the French word for water (“de l’eau”), dloHaiti sets up solar-powered kiosks that purify water on-site. It also hires teams to distribute the water to nearby communities. The kiosks are made from off-the-shelf components, Chu said, and are optimized to treat Haiti’s abundant supply of groundwater.

While Haiti is still rebuilding critical infrastructure after a catastrophic earthquake in 2010, it experienced drastic water poverty, especially in rural areas, many years prior, the CEO said. In Haiti, the lowest price for treated water is 12 cents per gallon, about eighty times higher than the lowest price in the U.S., according to research by dloHaiti.

Frontier Hurdles

Global Trading | May 15, 2013


Leopard Capital Fund Manager, Thomas Hugger of Leopard Asia Frontier Fund and Managing Partner of Leopard Capital LP, goes through some of the major difficulties faced in various frontier markets in Asia.

In the frontier markets, even though you have electronic data services such as the internet, social media, and Bloomberg, it is very difficult to get financial papers or balance sheet papers, and other fundamental papers for some of the companies in these locations. Even if you go to Bloomberg and search on Bangladesh, you don’t have the balance sheet there. If you go into Bloomberg and look at Mongolian stocks, you will often find the price, but the description says, “The company currently has no available information on their current line of business as of 08/2008”. These are often blue-chip companies, and sometimes we have visited them or we have networks there, but there is limited information available.

But this is frequently because business is based on a more personal note, and I would say physical representation gives a big advantage. Our strategy on the private equity side complements this, so everywhere we have firms, we have offices. So we have an office in Cambodia, we have an office in Laos, we have an office in Haiti. When we are successful in fundraising for Myanmar and Bangladesh, we will have offices there too.

For private individuals it is still very difficult to invest in these markets. Go to a private bank in Hong Kong or Singapore, tell them you want to buy stock in Laos or even Vietnam and they will often tell you “Oh we are sorry, we cannot execute”.