How We Do It

NGSC Capital's initial product offering is the "NGSC Capital Indo EM Growth Fund" focusing on the emerging economies of S.E. Asia with particular reference to Cambodia, Myanmar, Laos, Thailand, and Vietnam ("CMLTV"). NGSC Capital with its partner, One Belt One Road Opportunity Ltd, has created the "Indo EM Growth Fund LP" to invest in Private Equity opportunities in Cambodia, Myanmar, Laos, Thailand and Vietnam ("CMLTV").
  • Region
  • Fund Highlights
  • Investment Committee
  • Deal Flow on Hand

Indo EM Growth Fund

Region

Myanmar | Thailand | Vietnam | Laos
Within Asia, the countries targeted by this Fund, excluding Thailand, are some of the fastest growing economies.
Real GDP Growth Rate

Regional Economic Survey - Geoeconomic Importance

  • A geopolitically important region
  • Strong historical trade ties with China and other major countries in the world
  • Highly favorable demographics
  • A rapidly expanding middle class
  • Structural economic reform has been enacted to varying degrees across the region
  • Population in aggregate rivals that of USA
  • Strong export growth
  • Fast growing domestic private consumption
  • Increasing need for significant infrastructure investment
  • Persistent growth of inbound investment, business travel, and tourism
  • Stable wage and price environment

The region has a very young population

The average population age of the region, excluding Thailand, is in the 20s

The region has a very young population

Source: The World Factbook—CIA


Rising population across all countries

Rising population across all countries

Source: International Monetary Fund

A Rapidly Expanding Middle Class

  • Asia is forecast to be responsible for almost all of the population growth in the world
  • The expanding middle class is anticipated to lead to more consumption and trade within Asia, and greater opportunities
A Rapidly Expanding Middle Class

Source: European Union Institute for Security Studies and AXA IM Research

A combined population rivaling that of the US

  • Serving as significant fuel for further economic growth
A combined population rivaling that of the US

Source: International Monetary Fund

Low average monthly salaries underpinning the export sector

  • Compared to other, more developed economies
Low average monthly salaries underpinning the export sector

Source: Numbeo

Export and Domestic Consumption growth outpaces the world's

Export and Domestic Consumption growth outpaces the world's

Source: International Monetary Fund


Export and Domestic Consumption growth outpaces the world's

Source: World Bank

GDP Growth and Forecast

Aggregate GDP in 2016 amounts to $712.75 billion US$

GDP Growth and Forecast

Source: International Monetary Fund

Indo EM Growth Fund

Fund Highlights

Private Equity Growth Fund
Focus Countries
Myanmar, Vietnam, Thailand
Fund Size
USD 100 mln
Target InvestmentsTarget Investments
Analogue: Old economy sectors with strong growth potential Digital: New economy sectors such as growth tech
Deal Size
USD 20-25 min
Max number of deals: 6-7
Max investment: 25% of total fund size
Deal Philosophy
Partnering with International business brands and strong local partners. Significant minority stakes with board representation to maximise influence. Focus on readily scalable sectors (such as hotels) Prioritise yield protection in early stages of deals
Fund Life
5 – 7 years
Extendable by 2 years
Sector Focus
The fund will take an opportunistic approach to deal sourcing. Frontier markets typically require investment in all areas of basic infrastructure and the fund will concentrate on investments in such areas. (See deal flow in Appendix)
GP Commitment
10% matching dollar
Lawyers
Sidley Austin LLP

Our Strategy

Fund Strategy

The aim of the Fund is to engage in opportunistic investments in this increasingly important region. It will focus on creating value by partnering marquee international brands with reputable local and regional businesses. It will invest in businesses and projects that offer the best potential. Wherever possible it will invest in deals that have a regional cross-border perspective in order to maximize growth and value.

Strong Team

The Fund's management team has a long history of, and reputation for, execution and delivering value. It has unparalleled business relationships in all the focus jurisdictions and includes team members who are resident in target countries such as Myanmar and Cambodia.

Flexible and Disciplined

The Fund will be nimble in seeking out opportunities in a fast-evolving investment environment. It will also be very disciplined in successfully executing and exiting investments.

Opportunistic Investment

Old Economy and Proven Growth Tech | Area With Strong Growth Potential | Partnering Seeking | International Business Brands | Enterprises in businesses of strong demand | Strong Local Entrepreneurs

Global or regional convenience store chains with strong profit records

International hotel managers with established payback guidelines for different classes of accommodation

International commercial franchises wanting to distribute goods and services to the region

Priority given to securing protection on yield at the early stage of an investment, without compromising on long term capital gains

Investments that are scalable across the region

Fund Details

  • 200m USD, expandable to 350m
  • 7 - 10 deals in total
  • Sweet spot 15-40m in deal size
  • Maximum single investment not to exceed 20 - 25% of fund
  • Significant Minority stakes
  • Active management influence via board seat participation

Fee Structure

  • Hurdle rate 7%
  • Fee 2 - 20

Attorney

  • Sidley Austin

Investment Exit

  • In silos/clusters or single entity
  • Trade sell or to list

Auditor & Tax Advisor

  • Ernst & Young

Fund Life

  • 5 - 7 years
  • Extendable for 2

Fund Administrator

  • Tricor IAG

GP Commitment

  • 10% matching dollar capped at USD 20m

Indo EM Growth Fund

Investment Committee

Andy Coulton

Mr. Andrew Coulton is the Non-Executive Chairman of NGSC Limited. He was previously appointed as a Director of NGSC Limited, an Executive Director in March 2014, and as Executive chairman in August 2014. From 2002 to 2012, he took up the roles of Chairman and Principal of Saffar Capital Limited, an investment and advisory firm focused on the Middle East and North America. Prior to this period, he was in Deutsche Bank AG in London from 1995-2002, where he worked as Managing Director and MENA Regional Chief Executive Officer. He first started his career at Goldman, Sachs and Co. in the listed derivatives business in London from 1982 to 1995. Before that, Mr. Coulton graduated from the University of Oxford with a Bachelor of Arts in Modern History.

Raymond Lai

Mr. Lai, the Principal of A R Evans Capital Partners, is a seasoned investment banker with over 25 years of experience. He is known for his integrity and institutional equities distribution capability. Mr. Lai served in the past as Managing Director of Merrill Lynch (Asia Pacific) Ltd, Smith Barney Shearson (Hong Kong) Ltd, and ChinTung Securities Ltd. He was responsible for the initiation and successful completion of the Thai Asia Fund and China Strategic Investment Ltd (both Hong Kong Stock Exchange Rule 21 listings) in the early 90s. Mr. Lai is currently an appointed advisor to the United Nations International Eco-Safety Co-operative Organization and the China Foundation for Desertification Control. He has also previously been appointed as a director of a number of listed companies in Hong Kong and overseas. Mr. Lai graduated from Indiana State University with an MBA.

C.C. Kwong

Mr. C. C. Kwong is a known expert of the country of Myanmar, focusing on opportunities in the hospitality industry and infrastructure development as the country enters a new era of growth under a civilian government. Mr Kwong spent over 25 years in banking and financial services, both as a private banker and investment banker. After years of working at Bankers Trust, Deutsche Bank, and EFG Bank, he co-founded the Asia private banking arm of La Roche & Co Bankquiers, one of Switzerland’s most prestigious private banks. Prior to this, Mr. Kwong headed Corporate Finance at Asian Oceanic Limited, a Hong Kong-based merchant bank.

Earlier in his career, Mr. Kwong spent 15 years as an Executive Director with his family company in trading and engineering until it was eventually acquired by Sime Darby, a leading Malaysian conglomerate.

Mr. Kwong is a graduate of Massachusetts Institute of Technology and Columbia Business School.

Alex Mong

Mr. Mong has over 35-year of experience in direct investment and real estate involving some 100 global transactions and 43 million square meters of developments. He participated in multiple industrial investments and private equity funds throughout his career. He was responsible for establishing and building the alterative investment business for Nan Fung Group, one of Hong Kong’s major business groups. The unit undertook equity and mezzanine transactions totaling some USD 2.5 billion inclusive of the InfraRed Real Estate Fund (formerly known as HSBC NF China Real Estate Fund) which focuses on investments in the Greater China Region. Mr. Mong raised money, originated transactions, and was active with subsequent exits of these investments. Mr. Mong started his career with Chase Manhattan Bank and joined Nan Fung Group in 1999 from a senior position at Banque Indosuez. He is a graduate of the University of Hong Kong.

Scott Wu

Mr. Wu is currently the CEO of J&L Development. He started his career in manufacturing business and has deep knowledge and experience with factories start-up and real estate projects throughout South East Asia especially in Vietnam and Cambodia where he gained extensive local connection and expertise. He was accredited with being the first foreign joint venture to have secured a USD construction loan on a residential project in Cambodia.

Mr. Wu holds a Bachelor degree of International Businesses from Griffith University.

Jerry Chiang

Mr. Chiang co-founded Shanghai Tronfund. He heads its Investment Committee and is an executive director of Tronfund International Hong Kong. Mr. Chiang is known for his expertise within China on reforming state-owned enterprises and conducting buyouts, something he did in cooperation with the Shanxi Provincial Government. He helped internationalizing domestic enterprises and enhancing their value through integrating their operating resources with those of global entities.

Mr. Chiang serves on various boards and committees on initiatives by the Republic of China's Ministry of Economic Affairs and its National Development Fund. He enjoys an established network of relationships with listed companies and family-owned businesses throughout the Greater China Region. Mr. Chiang holds a Master degree of Business Administration from Taipei University and was a graduate in Civil Engineering from National Chiao Tung University.

Senior Advisor and Regional Co-ordinator

Arthur Lai

Mr. Arthur Lai was the founder of ChinTung Financial Group in 1982, which grew from a small institutional broking firm into one of the largest investment banks in South East Asia, before the group was acquired by Standard Chartered Bank in 1998. After the acquisition, ChinTung continued to enjoy the dominant position in institutional distribution until Mr Lai’s departure, after which the company was renamed as Standard Chartered Securities Ltd. Mr. Lai started his career as an auditor at Touche Ross & Co in Chicago before he joined Cazenove & Co (now JP Morgan Cazenove), London as an investment analyst in 1978. Mr. Lai is known for his ability in identifying investment opportunities, structuring M&A transactions, and aligning the interest of Asia capital markets with that of international players during the 1980s. He holds a Bachelor’s Degree in Accounting from Illinois State University in the United States of America, and a MBA from Indiana State University.

Indo EM Growth Fund

Deal Executed

Project H

A. The Deal
A Global Hotel Management Group has entered into a Memorandum of Understanding with the General Partner, on behalf of the Fund, for exclusive rights in the country of Myanmar on its 2½-3 star hotel brand -- typically returning capital investment in less than 4 years on most of its properties

B. Opportunity and Key Takeaways
  • To develop over 20 hotels, of some 150 keys each, across Myanmar under one of the best known global brands.
  • To gain the advantage of a reduction in management fees as the number of completed hotels increases.
  • Strategic play on fast growing visitor numbers and robust strength of business travellers.
  • Matching our Fund’s capital with the quality projects and sites of local families and enterprises wishing to build high return, affordable hotels for the tourism industry in the country.
  • The strategic process involves teaming up with this marquee brand that has a long proven track records of investment returns.
  • Our ability to team up with the overseas Engineering and Construction arm of one of Chinese's major State Owned Enterprises will ensure the needed efficiency for timely completion of construction, renovation work, and turn-key delivery.

Deal under Execution

Project TM7

A. The Deal
Investing together with a reputable family in Yangon for a hotel as part of Project H, with some 200 rooms right adjacent to Yangon University and a thriving commercial area.

B. Opportunity and Key Takeaways
  • Competitive pay back period estimated to be 3.5 years from the start of operation.
  • Attractive valuation for a 30 year lease in exchange for the landowners receiving 40% of the interest in the project.
  • The Fund shall own 60% of the project and take a 7% preferred interest payment throughout the construction period.
  • Potential trajectory for a rate increase and sustainable rise in occupancy rate look excellent, hence potentially a strong appreciation of project value in due course.
  • Attractive estimated return allows cash flow of 3 hotels to be used in financing one new addition.
IRR: Estimated 30%
EXIT as it forms part of the cluster for an IPO on a major regional stock exchange.

Pipeline Deals

Project Stores

  • Opportunity to co-invest in the Master Franchise that operates one of the most profitable global brands of convenience stores, with a target to operate 75 — 100 own-brand stores over five years in the country of Myanmar, expandable to other emerging markets in the region. With the necessary network of stores, it will be well-positioned to meet the demand of a growing middle-class population and reach a level of performance similar to their operations in other countries in the region, Taiwan and China especially.

Project Marts

  • Opportunity to lead invest in a partnership with one of the fastest growing groups that operates discount mini marts in Asia, one which has proven expertise in merchandising and managing optimal inventory turnover, product quality, and services.
  • These characteristics again make it the perfect theme for an opportunistic investment in this region.
  • Aiming for a deal that covers the region except Thailand.

Project HHP

  • In principle agreement to enter into a similar deal with another Global Hotel Group for the right to the Region for its 3½ -4 star hotel brand that typically promote services apartment units alongside the hotel.
  • Aiming for a deal that covers the region except Thailand.

Project Wisara

  • Opportunity to work with a major Myanmar business group on a commercial development in conjunction with a key Chinese State Owned Enterprise which will give us the second investment in a Project H hotel again with some 200 keys.
  • The project is an integral part of a 4 acre project in a prime location on the edge of downtown Yangon right adjacent to a development by a major Japanese Group which would feature a six star hotel from Japan. Estimated IRR is 30%.

Project Partner

  • Thailand is the more mature country within the CMLTV region and therefore it is important to own the ability to find high value investments through teaming up with people and institutions that have the capability and contacts within the investment industry there. The Fund has entered into an agreement in principle to co-invest or parallel invest with currently the largest private equity investment group which possesses one of the best track records in the country. The CEO of the group has a deep knowledge of the economy and is a key advisor to its financial industry in the country. The investment group’s broking associate is jointly owned by one of the three major commercial banks in the country.
  • The key is to be able to value-invest in exciting entities which are viable listing candidates on the local Exchange. Investment will focus on the consumer lifestyle sector and on opportunities that have brand value and knowhow and which are positioned for solid earnings growth.

Project Z Living

  • For Thailand, Bangkok is emerging as both a traditional trading hub and also a talent incubutator. Lying as the backdrop in the city center are a collective of some 1,000 units of old shop houses, studio and apartments built during an earlier era, left behind the city’s rapid urbanisation, and owned by a renowned Hong Kong family.
  • The traditional office space and living quarters or apartments for working class residents clustered in the centre of the town is no longer the most effective solution for the upwardly mobile Millennial, Gen Z worker and start up companies. Gentrification of these old trader neighborhoods presently located in non-prime areas of the central district can be turned into hubs that support the burgeoning new economy within the city.
  • The intention is to inject these yield assets into an SPV and our Thai Partner and our Fund shall invest further capital to develop them into modern neighborhoods that will be the new "in" place to work and live within a vibrant community.
  • The renovation will offer contemporary experiences and digitalised infrastructure for its inhabitants, and thereby creating a flow of social affluence to the neighborhood. The result should translate into substantially higher rental income and a marked improved valuation for the transaction.

Project Studio

  • Opportunity in the largest Yoga Health business in Bangkok with 8 boutique hot yoga studios throughout the city, namely the largest yoga centre in Thailand and 2nd largest in Asia. All studios offer Yoga, Pilates, Core Blast etc. The key to the transaction is our ability to co-invest at a currently attractive value in this high growth and profitable business.

Project Food

  • Opportunity in fast growing delivery program for food of high quality ingredients and low calories in the city of Bangkok. The business was first launched 3 years ago and is enjoying a fast growing list of clientele and a strong premium brand recognition.

Project Sky

  • In principle agreement to enter into a similar deal with another Global Hotel Group for the right to the Region for its 3½ -4 star hotel brand that typically promote services apartment units alongside the hotel.
  • Aiming for a deal that covers the region except Thailand.

Project Cashew

  • An agriculture project targeting raw and processed cashew nuts. Cashew nut demand has been steadily rising in recent years.

Project HCM

  • An opportunistic situation in Ho Chi Minh City in Vietnam and is one amongst a few very attractive projects we would want to investigate for a meaningful participation in the fast growing Vietnam economy. It is a project that would form part of Project H by taking over an existing local 3.5 star hotel of 100 rooms, currently owned by the City Tourist Board for mid-end tourists, located in the most central and busy tourist area of the City and turn it into an international 3 star standard. It is a project that has an established traffic attraction and cash flow looking to unlock its value with improved yield.

Project Residence

  • A project in the heart of Ho Chi Minh City belong to the Government. The building frame has already been fully constructed to the top level and it needs an investor to joint venture and complete the building for high end service apartments catered to pent-up demand by expatriates from international corporations in Vietnam and for city apartments to be sold to a robust demand in the market for quality and sophisticated users.
NGSC Capital
Singapore | Hong Kong | International