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Transcript of Tembusu Growth Fund II. This document is for discussion purposes only and does not constitute an...
Tembusu Growth Fund II
Tembusu Growth Fund II
This document is for discussion purposes only and does not constitute an offering in any way or any jurisdiction. Reproduction and communication of this document in any form or manner is strictly prohibited. This document has not been independently verified and the authors are not liable for any claims or obligations whatsoever that may be attributable to this document. This document is strictly private and confidential and remains the property of the authors.
This product is meant for accredited investors (individuals whose net personal assets exceeds in value S$2 million or whose income in the preceding 12 months is not less than S$300,000) and institutions (corporations with net assets exceeding S$10 million) only. All investors should seek independent and competent advice on the suitability of this Fund in meeting their investment needs before making a decision to invest in this Fund.
Disclaimer
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Tembusu Growth Fund II
Table of Contents
I. Executive Summary
II. The Fund Manager – Tembusu Partners
III. Investment Strategy
IV. Investment Selection
V. Track Record
VI. Other Details
VII. Appendix A: Biographies
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Executive Summary
Tembusu Growth Fund II
Executive Summary
5
Founded by Mr. Andy Lim, Mr. Tan Kim Seng and two other successful entrepreneurs
20 staff in six offices spanning Singapore, China, UK, and ANZ
Tembusu Growth Fund I (“TGF I”): S$100 MM Pan Asia growth capital fund
Nanjing Growth Fund: US$80 MM China growth capital fund
TGF II: Platform for investors seeking attractive risk-adjusted returns from alternative assets in Emerging Asia
Mandated to invest in growth companies seeking expansion capital
Exit investments within 3 to 5 years through IPOs or trade sales
Singapore Private Equity
Manager Established In
2006
S$210 MM Assets Under Management
Over Two Funds
Raising S$300 MM For
Tembusu Growth Fund II
(“TGF II”)
Tembusu Growth Fund II
Summary of Principal Terms
Fund Company Tembusu Growth Fund II Ltd
Fund Manager Tembusu Partners Pte Ltd
Fund Size S$300 million
Minimum Investment S$5.0 million (Institutions) & S$1.0 million (Individuals)
Target Return (p.a.) 25%
Hurdle Rate (p.a.) 8%
Carried Interest 20% after hurdle on a catch up basis
Management Fee Year 1 - 3 : 2.00% Year 4 - 5 : 1.75%Year 6 - 7 : 1.50%
Investment Period 3 years from Initial Closing
Charter Life (years) 5 + 1 + 1
Tax and other benefitsQualified for zero-rated tax incentive under EDB S13H Scheme for Funds
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Tembusu Growth Fund II
Portfolio Allocation
Single investment limit – not more than 15% of the fund or S$30 million, whichever is lower Portfolio size – no more than 25 companies Expected investment size – S$10 to S$20 million
Fund Allocation by Stage
90% growth stage / pre-IPO / buyouts / restructuring* 5% early stage 5% Private Investment in Public Equity (PIPE)
Fund Allocation by Geography
Singapore-based or Singapore-linked businesses - 50% Greater China, Southeast Asia (ex. Singapore), India, ANZ - 50%
Fund Allocation by Size
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*Charter of the fund allows for investments in companies in these stages. However, the fund is primarily and substantially focused on growth stage companies.
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Tembusu Growth Fund II
The Fund Manager – Tembusu Partners
Tembusu Growth Fund II
Tembusu Partners Timeline
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* Appointed as exclusive distributor for China Capital Impetus Fund for Singapore
Incorporation of Tembusu
Partners Limited
Successful launch of S$100
MM TGF I
2007 Investments:
TTMI VDH Energy Hongwei ACTAtek Infinite Frameworks Artivision Technologies Standard Water Tongji Environment Global Roam China Dredging Ying Tai Biotechnology
Successful launch of US$80
MM Nanjing Growth Fund
Agreement with China AMC (part of Citic Group)*
Expected first close of S$300
MM TGF II
2006 2007 2009 2010
2008 Investments:
Sports Asia Tangshan Ganglu
2009 Investments:
Cherie Hearts Silver City Minerals
2009 Investment exit: VDH Energy: 37.6% IRR
2010 Investment exit: Tongji Environment: 8.5% IRRCherie Hearts: 72% IRR
2008
Tembusu Growth Fund II
The Tembusu Value Add
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Individual Partner
Sourcing
Weekly Conference
Portfolio Review
New Deals
Resource Planning
Partner Inputs
Market Feedback
Due Diligence
Detailed Action Plan
Presentation to All Partners
and On-Site Visit
Syndication Candidates
Decision by Investment Committee
Portfolio Monitoring
Value Creation
Follow on Funding or
Exit
Local Knowledge & Networks
Optimal Deal Sourcing
Access to Global Intelligence
International Networks
Experienced Team
Strong Team of Advisors
Optimal Deal Structuring
Syndication
Highly Experienced Investment Committee
Advice to Investee Management
Contacts With Potential Customers
Business and Market Analysis
Network of Strategic Investors and ECM Makers
Tembusu Growth Fund II
Organizational Structure
International Board of Advisors
Management Team
Investment Committee
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Investment Team (China)
Investment Team
(Singapore)
Administrative & Accounts
Team
Tembusu Growth Fund II
*other Investment Committee members and Advisors to be confirmed
Principal Investment Committee and International Board of Advisors
Chairman, Nanyang Executive Program, Nanyang Business School, Singapore
Honorary Professor, Faculty of Management, Xiamen University, China
IC MEMBER EXPERIENCE
Professor Wee Chow Hou
Sheik Faisal Al-Thani
Chairman, Namma Real Estate Company Chairman, Qatar National Export Import
Company Deputy General Manager, and Qatar
Petroleum’s Representative at Anadarko Qatar Energy
Board of Advisors
Chairman, Tembusu Partners Pte Ltd Chairman, MoneyWorld Asia Chairman, Viking Offshore and Marine Honorary Consul, Republic of Lithuania
Andy Lim
IC Member
Yeo Cheow Tong
IC Member
Chairman, Board of Governors, Raffles University Member of the Global Advisory Board of the University of
Chicago Graduate School of Business Minister, Ministry of Transport, Trade & Industry, MD, LMA & Pacific Precision Castings
Board of Advisors
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Tembusu Growth Fund II
Management Team
Mr Mahim Chellappa Principal Mahim has over 9 years of investment banking experience in the U.S. and Southeast Asia, with expertise in private equity, M&A, structuring and deal-making across a broad set of industries.
Ms Emily Goh Director Emily has more than 9 years of field experience with regional start-up and growth companies. She has also advised businesses on strategic alliances, cross-border M&A and capital raising activities.
Ms Emily Zhang Investment Director (China) Emily Zhang has over 7 years experience in consulting, business development and marketing in China and New Zealand.
Mr Eric DingInvestment Director (Shanghai) Eric was previously working in the corporate restructuring, listing and company management field. He has also provided financial and listing consultation services for many Chinese companies listed on the Singapore Exchange
Mr Chandran Gnanakuru Investment Director (Europe) Chandran is based in London, and spent 12 years running the alternative asset program of several family offices. He currently works closely with PE/VC teams on fundraising activities.
Mr Daniel LeeInvestment Director (Australia, NZ) Daniel has more than 15 years of experience in the asset management, treasury and securities industry. He is also involved in the hotel management and property development in New Zealand
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Tembusu Growth Fund II
Investment Strategy
Tembusu Growth Fund II
Fund Focused on Emerging Asia Middle Market Through Significant Minority Investments
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Emerging Asia has consistently outperformed ROW This dynamic region is expected to play a leading global
economic role Much of developed world faces significant long-term crises,
including massive debt, steep budget deficits, and structural unemployment
Emerging Asia
Typically, greater revenue and earnings acceleration than large cap companies
However, much less access to capital, providing investment opportunities for “hands-on” investors like Tembusu
Tembusu invests with proven entrepreneurs who typically have significant personal stakes in their companies
We target a 20% - 30% ownership stake and board representation
Commit internal resources towards improving the finance and operations of our portfolio companies as required
Middle Market
Significant Minority
Investments
Tembusu Growth Fund II
Capitalize on Strong Growth in Asia
Continued strong growth from Asian economies – particularly in our focused areas of China, India, South East Asia, and Australia
Strong emerging middle class driving domestic consumption
Rapid urbanization with significant infrastructure building
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Source: IMF and www.xe.com. SE Asian basket consists of 7 countries (Singapore, Indonesia, Philippines, Thailand, Malaysia, Vietnam, and Cambodia), Pan Asian basket consists of 10 countries (Singapore, Indonesia, Philippines, Thailand, Malaysia, Vietnam, Cambodia, China, India, and Australia), Western Europe consists of 9 countries (Ireland, United Kingdom, Portugal, Spain, France, Belgium, Netherlands, Germany, and Italy).
Tembusu Growth Fund II
Significant Minority Investments in High Growth Middle Market Companies
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Unique Growth Investment Opportunities
Minority Investment
Significant equity stake is key for management
to be motivated to succeed
Tradition of Asian family businesses
selling only minority stakes
Tembusu is one of the few PE funds with
expertise in this space
Middle Market
Selectively invest in high growth SMEs
Our fund size is tailored to most attractive
investments in Emerging Asia
Less efficient capital markets available for SMEs creates value
opportunities
Tembusu Growth Fund II
Team Focused on Maximizing Returns Whilst Minimizing Risk
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Senior Management experienced in running companies as well as working alongside entrepreneurs
General Partners committed significant funds to TGF I and are committed to TGF II
Entrepreneur Led
Management Team
Close attention to investment structures in order to maximize returns, while limiting our downside risks
Experienced in the use of several different instruments in our investment agreements
No reinvestment risk, Tembusu will identify appropriate opportunities for partial or full realization of investments
Capital gains on portfolio investments and distribution proceeds to investors are exempt from taxation in Singapore
Aggressive Deal Structures
Attractive Fund Structure
Tembusu Growth Fund II
Aggressive Deal Structures
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Our structured private equity investment agreements have included:
Convertible loans with detachable warrants
Redeemable Convertible Preference Shares
Performance guarantees with clawback provisions
Put options exercisable in the event of non liquidity after a specified time period (e.g., 2 years)
Tembusu carefully and aggressively structures our investments in order to maximize returns, while limiting our downside risk
Tembusu Growth Fund II
Investment Selection
Tembusu Growth Fund II
Investment Criteria
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High Growth and Scalable Companies
Tembusu Can Enhance Value Through Active Sponsorship
Targeted Industry Focus
Proprietary Deal Sourcing
Companies Have Exit Visibility and Feasibility
Tembusu Growth Fund II
Aggressive Growth Capital Investments
Growth Stage Investment Focus Emphasis on companies that have expansion-ready business models
Value Creation Utilize entrepreneurial experience to grow portfolio companies General Partners have over 90 years of combined entrepreneurial experience
Hands-On Investment Approach Assist portfolio companies in Business Development, Finance and Corporate Governance Tembusu team has extensive experience in Private Equity, M&A, Investment Banking,
Financial Accounting, Management Consulting and Business Operations
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Company Value
Venture Capital
Business Plan
TGF II Exit
Growth Expansion
Globally Competitive Enterprise
Time
TGF II’s Focus
22
Tembusu Growth Fund II
Sector Focus Emphasis on core sectors where Tembusu has operating and
investment expertise:
2323
Sector Experience
Natural Resources & Oil Services
GP is Chairman of a listed offshore & marine services provider Another GP founded a leading oil & gas services company Existing investment in TGF I
Clean Energy Exited investment in TGF I
Infrastructure Engineering Existing investments in TGF I
Technology, Infocomm & Media Existing investments in TGF I
Education
GP founded and built a multi billion dollar education conglomerate with operations in China and SE Asia Exited Investment in TGF I
Healthcare & Biotechnology IC member was a Senior Government Official in the Health Ministry Existing investment in TGF I
Tembusu Growth Fund II
Proven Proprietary Deal Sourcing Ability
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IndustryCompany
DescriptionInvestment
StageLocation
Consumer Healthcare Water Filtration SEED South East Asia
Information Technology
Job Search Portal Growth South East Asia
Technology Data Storage Growth Asia-Pacific
Bio TechnologyPharmaceutical Intermediaries
Growth China
Most investees in TGF I were proprietary investments Highly connected network of advisors Sample of potential investments under consideration:
Tembusu Growth Fund II
Track Record
Tembusu Growth Fund II
TGF I – Tembusu Partners’ Flagship Fund
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Raised S$100 million from four general partners and 38 high net-worth individuals
General Partners (including Chairman) committed approximately S$50 million
TGF I’s strategy capitalized on growth opportunities available in the Southeast Asia and Greater China middle-market business space
Invested in 15 entrepreneur-driven companies with scalable business models, investments made between 2007 and 2009
Realized three investment exits and three liquidity events since inception
Achieved IRR of 38% from first investment exit in July 2009 and 72% IRR from third investment exit in September 2010
Three TGF I portfolio companies expected to list on Hong Kong, Malaysia and Australian exchanges during the next six months
Entrepreneur Driven Investees
TGF I Raised S$100 Million
Executed Successful Exits
Tembusu Growth Fund II
TGF I – Portfolio Segmentation
Segmentation by Industry Segmentation by Geography
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Tembusu Growth Fund II
China Dredging
Offshore & Marine
China
Nov 2007
GlobalRoam
Internet Telephony
Singapore
Oct 2007
Tongji Environment
Water Treatment
China
Oct 2007
Artivision Technologie
s
Technology
Singapore
Jul 2007
TGF I – Portfolio Companies
Standard Water
Water Treatment
China
Aug 2007
Infinite Frameworks
Media Post-Production
Singapore
Jun 2007
VDH Energy
Biodiesel
Singapore
Apr 2007
Hongwei
Synthetic Textiles
China
Apr 2007
ACTAtek
Biometric Security
Singapore
Jun 2007
TTMI
Metals Recycling
Malaysia
Dec 2006
Silver City Minerals
Mineral Exploration
Australia
Nov 2009
Sports Asia
Sports Apparel
China
Feb 2008
Tangshan Ganglu
Steel Manufacturing
China
Feb 2008
Cherie Hearts
Early Education
Singapore
Jan 2009
Ying Tai Biotechnolog
y
Bio-Pharmaceutical
China
Nov 2007
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Tembusu Growth Fund II
Investment Exit – VDH Energy
Van Der Horst Biodiesel Pte Ltd (“VDHB” or the “Company”) is a start-up company incorporated in 2006 engaged in biodiesel production Annual production capacity of 200,000 tonnes of biodiesel
TGF I invested S$1.0 million in VDHB through a convertible loan in April 2007, with the view to exit through a listing on the Singapore Exchange within 6 to 12 months
The convertible loan was converted to ordinary shares in October 2007 and swapped for 9.1 million shares of Van Der Horst Energy Ltd, a listed company on the Singapore Exchange’s Catalist board, through a reverse-takeover process
The investment was successfully divested in June 2009 through a block trade on the Singapore exchange, yielding an investment IRR of 37.6% Investment period: Apr 07 – Jun 09 (2 years 2 months) Return Multiple: 2.0x Investment IRR: 37.6%
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Tembusu Growth Fund II
Investment Exit – Tongji Environment
Tongji Environment (Asia) Pte Ltd (“Tongji” or the “Company”) is engaged in the business of wastewater treatment, sludge treatment and environmental engineering projects in various parts of China
Tembusu invested S$7 million in the Company through a combination of convertible loans, common equity, and collateral provision in October 2007 for an effective stake of 27.6%
In June 2010, Tembusu exercised its redemption rights on its convertible loans and sold its equity interest in Tongji for a total consideration of S$8.5 million Investment period: Oct 07 – Jun 10 (2 years 8 months) Return multiple: 1.2x Investment IRR: 8.5%
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Tembusu Growth Fund II
Investment Exit – Cherie Hearts
Cherie Hearts Group International Pte Ltd is a childcare centre engaged in the provision of early childhood education with over 65 centres in Singapore.
Tembusu invested S$3 million in the Company through a loan with detachable warrants in January 2009.
In September 2010, Tembusu exited the investment via a negotiated management buyout. Investment period: Jan 09 – Sep 10 (1 year 9 months) Investment IRR: 72%
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Tembusu Growth Fund II
Other Details
Tembusu Growth Fund II
Contact UsUnited Kingdom120 West Heath RoadLondon NW3 7TXUnited Kingdomt: (44) (0) 20 8458 1947
Beijing1513 Zhejiang Tower, Anzhen Xili (North 3rd Ring Rd)Chaoyang District, Beiijng 100029, Chinat: (86) 10 6445 2108 f: (86) 10 6445 1286m: (86) 1351 105 6187m: (86) 1870 139 8078
ShanghaiOffice 1001, Hong Kong Plaza, 283 Huai Hai Road Central, Shanghai 200021, Chinat: (86) 21 6390 6123f: (86) 21 6390 7306
Singapore (Head Office)3 Phillip Street #08-04 Commerce Point Singapore 048693 t: (65) 6536 0578 f: (65) 6536 0576 e: [email protected]
Nanjing (China HQ)23F Huijie Plaza, 268 Zhongshan Road, Nanjing 210008, Chinat: (86) 025 8319 1520f: (86) 025 8319 2351
Australia & New Zealandc/o 155 Queen StreetAuckland, New Zealandt: (64) 21 2828 988
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Tembusu Growth Fund II
Appendix A: Biographies
Tembusu Growth Fund II
Investment Committee Members Biography
Mr. Andy Lim chairs the Investment Committee of TPPL. He is also the Chairman of MoneyWorld Group of Companies, a leading foreign exchange player and Chairman and controlling shareholder of publicly listed Viking Offshore & Marine Ltd. His other Board appointments include Chairman of Alpha Singapore, Board of Governors of Raffles University, and President of Enterprise 50 Club. Mr. Lim is also the Honorary Consul to the Republic of Lithuania. Mr. Lim graduated with First Class Honors in Engineering from Cambridge University and an MBA Degree at University of California at Los Angeles (UCLA) in 1989.
Mr. Yeo Cheow Tong is currently a Member of Parliament for Hong Kah GRC. Mr. Yeo started off his career in the Singapore Economic Development Board and thereafter joined LeBlond Makino Asia in 1975. In 1981, he was appointed Managing Director of both LMA and its subsidiary company, Pacific Precision Castings. Mr. Yeo first entered politics in 1984 as the elected MP for Hong Kah Constituency and was appointed Minister of State for Health and for Foreign Affairs in 1985. In 1988, he became the Acting Minister for Health and became full Minister in 1990. An experienced political leader, he has handled different Ministerial positions including Health, Community Development, Trade and Industry, Environment and Transport. He subsequently retired as Minister for Transport in 2006.
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Tembusu Growth Fund II
Board of Advisors Biography
Dr Faisal Althani is currently based in Qatar and is the Chairman of Namma Real Estate Company and Qatar National Export and Import Company. He has a strong background in the natural resources sector, with numerous years of experience gained at several petroleum companies – with which he is currently the Deputy General Manager and Qatar Petroleum’s Representative at Anadarko Qatar Energy. Dr Althani has studied in the United States of America as well as the United Kingdom and was previously a Fullbright Scholar studying at University of Colorado, Boulder
Professor Wee Chow Hou is Head of the Marketing and International Business Division and Chairman of the Executive Programs at the Nanyang Business School, Nanyang Technological University (Singapore). He is also an Honorary Professor at Xiamen University (China). Professor Wee has consulted/conducted executive training for over 250 major organizations in over 30 economies/countries, including Fortune 500 companies, and is best known for applying Chinese classics to modern business strategies and practices. Professor Wee also sits on several boards of publicly listed companies in Singapore, and is also a member of various advisory boards locally and internationally.
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