Having already lined up five multimillion-dollar investments, Leopard says it will go in search of more funds during 2010
We are constrained by our small fund size, not by our deal flow, which continues to grow."
PRIVATE equity fund Leopard Capital closed its first Cambodia-focused multi-sector investment fund Thursday with US$34.12 million in capital and said it plans to launch a second fund in 2010 on expectation it will soon be fully committed.
“We have committed over half of our fund to five investment projects and are evaluating several more which we hope to close in the months ahead,” Leopard founder and Chief Executive Officer Douglas Clayton said by email.
He did not go into further detail but Leopard’s newsletter for November and December said it had committed $15.8 million to five projects, paying in $11.6 million of the total.
These include boutique beer maker Kingdom Breweries, which is set to launch its first offering later this year, and Siem Reap luxury apartments Angkor Residences.
It is also currently undergoing due diligence on two further investments worth a combined $4.6 million, which will take its invested capital to 66 percent of the total fund as of late November.
The fund has also made a $3.1 million venture investment in a new WiMAX broadband service provider, and a $1.5 million growth investment in what it claims is a profitable microfinance institution. Neither target was identified by name.
Leopard Capital was set up in 2007 to invest in Asian frontier markets. Its Cambodia fund was launched in April 2008, and the firm announced last year it would launch a fund in Sri Lanka in 2010.
Clayton said the second Cambodia fund would be launched following that.
The proportion of the fund’s capital committed was boosted last month by Leopard’s $5 million investment in a syndicated 18-month bridging loan arranged by Standard Bank and ANZ Bank to finance Royal Group's acquisition of the 61.5 percent stake in Mobitel it did not already own.
“This deal was quite a complex transaction in the development of Cambodia’s financial sector and helps open the door to other Cambodia businesses to access the global syndicated loan market,” Clayton said.
Leopard also extended the second $300,000 tranche of its structured loan to Greenside Holdings late last year, increasing its total exposure to $1.3 million in the company, which has a 45 percent stake in the electrical power grid in Kampong Cham province.
According to Leopard’s newsletter, the loans to Royal Group and Greenside are at “the safer end of our risk spectrum as they provide immediate secured cashflow”.
The Royal Group group loan will be repaid when it resells the controlling stake to “a new foreign strategic investor”, Leopard said in the newsletter.
“There should be another big M&A deal ahead, which will again put Cambodia into the global spotlight,” it said, in the first clear sign that Royal Group does not intend to run the operator itself.
The firm has remained quiet on its intentions for the operator, but it has been linked to talks with France Telecom, Japan’s NTT DoCoMo and Malaysia’s Axiata, among other foreign players reportedly interested in a stake in the operator.
Leopard said it was also in advanced discussions to invest in a bank, a rice mill, a water bottler, a seafood processing plant, a renewable energy producer, a family entertainment project, some incomplete or distressed buildings, and various other proposals.
“We are constrained by our small fund size, not by our deal flow, which continues to grow as people contact us constantly to pitch deals,” the newsletter said. “Unless we get some more investor inflows this month we anticipate that Leopard Cambodia Fund may be fully invested in the next 3-6 months.”