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”.

Leopard Cambodia Fund exits mineral water producer Kulara

AltAssets | May 07, 2013

Emerging markets firm Leopard Capital has successfully exited its entire investment in Cambodian mineral water company Kulara Water to the company’s founding shareholder.

The transaction harvested an undisclosed profit for Leopard Cambodia Fund, the firm said. It provided Kulara with venture financing and operational support, enabling Kulara to complete its factory construction and refine its business plan.

Richard Intrator, CIO of Leopard Cambodia Fund, said, “Leopard Capital is proud to have helped create another world-class consumer product and local brand in Cambodia. Kulara’s factory is now fully operational, and eau Kulen is poised to become a significant player in the local water market. Having supported Kulara from a concept to a successful launch, we have now returned ownership to its founder and will redeploy the sales proceeds into other promising businesses.”

Leopard Cambodia Fund was launched by Leopard Capital in April 2008 as the first private equity fund for Cambodia. It raised $34m and has since made 14 investments in Cambodia, Thailand, and Laos, including CamGSM, ACLEDA Bank, IPR, Kingdom Breweries, Tropical Beverage Co, Kulara Water, Phnom Penh Water Supply Authority, Greenside Holdings, EDL Genco and Engage.

Leopard Capital was founded in 2007 by Douglas Clayton and manages two other funds: Leopard Haiti Fund, and Leopard Asia Frontier Fund.

Leopard Capital’s CEO Douglas Clayton discusses Myanmar with Rishaad Salamat on Bloomberg Television’s “On the Move Asia”

Bloomberg | April 23, 2013

Leopard Capital CEO Douglas Clayton discusses the EU lifting sanctions on Myanmar. He speaks with Rishaad Salamat on Bloomberg Television's "On The Move Asia." (Source: Bloomberg)

Watch the interview here: Myanmar Deserves to Be Supported by World: Clayton

Leopard Cambodia Fund LP Invests in Engage Resources (Thailand) Co. Ltd.

Leopard Capital - Press Release | March 18, 2012

Phnom Penh, Cambodia – Leopard Capital LP announced today that Leopard Cambodia Fund LP has invested in Engage Resources (Thailand) Co. Ltd. (“Engage”), a producer and developer of kenaf-based products. Kenaf is a fibrous plant used in the animal feed, construction, and paper & pulp industries. Leopard Cambodia Fund’s investment provides growth capital required for Engage to continue its product development and to expand its operations from Thailand into Cambodia.  This growth capital injection will contribute to Engage’s product development, add value to its core business, and assist its regional expansion by drawing on Leopard’s local experience and networks.

Richard Intrator, Managing Partner and Chief Investment Officer of Leopard Cambodia Fund LP, commented: “We are pleased to invest in a fast-growing, pan-ASEAN agriculture business and help introduce a new high-yielding crop into Cambodia.  Engage’s management has taken a leading role in developing more efficient methods of producing kenaf in Southeast Asia.”

Robert Brodie, the CEO of Engage, added: “We welcome Leopard Capital as a funding partner to our Group. Leopard’s experience in developing projects and key networks across the region will prove valuable as we expand our operations into Cambodia.”

Asia alts managers voice regulatory concerns

Asian Investor | 21 February 2013
By Georgina Lee

Thomas Hugger
COO & CFO of Leopard Capital

A private equity COO fears rule tightening is too broad-brush and will inflate costs, while a fund-of-hedge-fund COO says clarity is needed over new reporting requirements.

Private equity and fund-of-hedge-fund managers in Asia point to growing fundraising difficulties outside the region amid a regulatory clampdown.

The alternative investment fund managers directive (AIFMD) comes into force in Europe as early as this June – reform that will reshape the way alt funds are marketed in the EU. No matter where they are domiciled, all non-Ucits funds are covered under the directive.

Thomas Hugger, COO for $57 million PE manager Leopard Capital, says having the same, broad-brushed regulatory principles governing private equity funds and hedge funds fails to take into account the customised nature of how PE sponsors put their money to work.

He notes that using a depository is a challenge for PE managers. Unlike hedge funds, PE sponsors do not always invest in a company’s equity. Instead, they may invest by providing mezzanine capital, convertibles, loans or other structured products and derivatives.

How to Invest in Frontier Markets

Capitalist Exploits | 24 January 2013

Investing in frontier markets is a challenge due to lack of liquidity and significant set-up times. One way to circumvent these problems is to Invest in other people's expertise through a managed fund.

We work hard to associate ourselves with smart individuals where we can reciprocate value. This not only gives us opportunities to put capital to work, but provides us the ability to grow a powerful network filled with influential people.

One such person I have become friendly with is Thomas Hugger, COO & CFO of Leopard Capital, a frontier markets private equity fund we have discussed previously in these pages.

Thomas has had a global career, spending 27 years in private banking, where he specialized in managing portfolios of listed and unlisted equity investments. Further, he is a CFIA. His most recent venture is the formation of the Leopard Asia Frontier Fund (LAFF), a liquid investment vehicle focusing on Asia’s frontier markets.

I recently caught up with Thomas in Phnom Penh where we had a discussion about his fund, as well as some opportunities he sees right now in the countries LAFF is active in. Enjoy!

Pearl of Wisdom

7th Heaven Properties | 31 December 2012
The Caribbean Property Investor
By Douglas Clayton, CEO of Leopard Capital

As billions of dollars of foreign assistance pour into the “Pearl of the Antilles” driving economic growth, the CEO and Founder of pioneering private equity firm Leopard Capital explains why he believes Haiti is poised for growth and mutually beneficial investment opportunities abound

In crisis lies opportunity, states an old Chinese proverb. When it comes to Haiti, most outsiders comprehend the crisis part, having seen images and heard accounts of the grinding poverty, the devastating earthquake, the homeless tent dwellers and cholera outbreaks. An entrenched industry of non-government organizations (NGOs) dutifully highlights Haiti’s heartbreaks, eager to maintain the donation flow through their bureaucracies. While Haiti offers more plotlines than tragedy, pathos dominates its international narrative.

Investing in Asia's Frontier, With Eyes on the Horizon

The New York Times | 26 December 2012
By Ron Gluckman

Douglas Clayton, the founder and managing partner at Leopard Capital.

PHNOM PENH, Cambodia — Investors started poking around for deals here five years ago, as the war-torn country began to move past its legacy of genocide and coups. When the global financial crisis struck, Cambodia’s fast-growing economy crashed and the dollars flowing from abroad evaporated.

Douglas Clayton stayed put. In the midst of the crisis, he raised $34 million, starting the first investment fund focused on Cambodia.

“High risk also means the potential for high returns,” said Mr. Clayton, the founder of Leopard Capital.

Thomas Hugger: Only Frontier Markets Offer Uncorrelated Returns From A Troubled Global Economy

China Money Podcast | 15 October 2012

In this episode of China Money Podcast, guest Thomas Hugger, CFO of Leopard Capital, a private equity firm focused on investing in Asian frontier markets, discusses the successes and failures of his firm's investments in Cambodia, the impact on frontier markets from a slowing Chinese economy, and why frontier markets offer better risk-return profiles than emerging markets.

Listen to the full interview in the audio podcast, watch the shortened video version or read an excerpt.

INTERVIEW EXCERPT

Q: First give us a brief introduction of Leopard Capital?

A: Leopard Capital was founded in 2008. Our general goal is to make private equity investments in frontier markets. We've raised two funds so far. In March 2008, we raised our first private equity fund to invest in Cambodia. Another fund was raised to invest in Haiti. We are hoping to launch two additional funds to invest in Bangladesh and Bhutan this year.

Profile: Leopard Capital's Douglas Clayton

Asia Venture Capital Journal | 04 October 2012
By Susannah Birkwood

Leopard Capital CEO Douglas Clayton refused to let gun-wielding Cambodians distract him from setting up the country’s first private equity fund. He prides himself on being first on the ground in frontier markets

"You felt like you could get killed in the night and nobody would ever know."

This was Douglas Clayton's perception of Cambodia when he first visited the country as a tourist in 1991. Sixteen years later - despite having only been back on two occasions in the interim - Clayton established Cambodia's first private equity firm, Leopard Capital.

"I said that if in 16 years this country can completely transform from a very scary, dangerous place to a place where I could bring my family, in another 16 years it might be a modern country," he says by way of explanation for the move. When he first visited, the UN was going into Cambodia to enforce an election; the streets were unpaved, unlit and unclean, "and all these people were walking around with guns."

Leopard Capital hires Richard Intrator as Managing Partner and CIO for Cambodia

Leopard Capital - Press Release | September 03, 2012

Mr. Richard Intrator has joined Leopard Capital Cambodia Ltd as Managing Partner and Chief Investment Officer. Leopard Capital Cambodia Ltd. manages Cambodia’s first investment fund, the US$ 34 million Leopard Cambodia Fund which was launched in 2008. Mr. Intrator will be based in Phnom Penh, Cambodia.

Mr. Intrator has a long and distinguished career in finance, private equity, management consulting, and operations. Prior to joining Leopard Capital he was the Executive in Residence at Stamford International University (Thailand). Mr. Intrator earlier held senior roles with IMAX, Petry Media (a portfolio company of Patriarch Partners), PaineWebber, Kidder, Peabody, & Co., and Booz, Allen & Hamilton. His past Board memberships include The Lighthouse International (Vice Chairman), Juniper Content Corp., and Golden Books Family Entertainment. Mr. Intrator is a Certified Public Accountant, and has a B.S. from the Wharton School and an M.B.A. from Harvard Business School.