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VIEW PRESENTATION VIEW PRESENTATION Presentation Transcript

  • Managing Through & Taking Advantage of Crisis “ The Asia Experience” K. O. Chia Managing Director [email_address] IFC Annual Global Private Equity Conference May 5-7, 2004
  • Walden International Backgrounder
    • Established in 1987
      • U.S.: San Francisco & Palo Alto
      • Asia: Greater China; Japan, India, ASEAN
    • US$1.5 billion in funds under management
      • Global institutional investors; governments
      • Corporate investors
    • Stage independent Investment strategy:
      • Early stage to pre-IPO
      • Technology focus: communications, semiconductor; software & electronics
    • “ Think global, act local” investment strategy
      • Pan-Asia roll-out
      • Asia-U.S. cross border
  • Geographic Coverage Singapore San Francisco Mumbai Beijing Hong Kong Palo Alto Kuala Lumpur Manila Taipei Tokyo Shanghai
  • Global & Asian crisis Jan. 31, 1994 12,599.23 Aug. 31, 1997 16,820.31 Jan. 31, 1995 8,190.42 Aug. 31, 1998 7,926.35 Mar. 31, 2000 18,397.57 Sep. 30, 2001 11,180.79 Mar. 31, 2000 5,132.52 Apr. 30, 2001 2,202.86 Sep. 30, 2001 1,836.19
  • History of China Euphoria 1993-1995: Manufacturing from HK-Shenzhen
      • 1995-1996: Infrastructure Building
    1996-1998: Telecom Service Providers 2001: Land of Opportunities 1998-2000: Internet Hype FIVE waves of China investment euphoria
  • Investment Experience in China
    • Local Chinese companies: SOE or its spin-off
    • Joint Ventures with multi-national companies
    • Young technology start-up companies started by returning Chinese nationals or overseas Chinese
    • Start-up companies with local Chinese nationals
    10 years of investment experience in China... still learning :
  • Sustaining through various crisis
    • Survival of portfolio companies
      • Re-focus business operations, preserve cash
      • Business model transformation
      • Seek merger opportunities
    • Exists
      • Flexible investment structures for M&A or IPO
      • Potential exists in multiple markets
    • Fund Management (LP-GP relationship)
      • Seeking for potential new investment
      • Working closely with portfolio companies
      • Constant dialog with LP on developments
  • Example: Newave Semiconductor
    • Company profile
    • 3 founders: HK, Twn, China
    • Previously worked together in Shanghai
    • Founded as a U.S. company
    • Target markets
    • China telecom market
    • Popular chipsets for mass
    • Harness talent from China
    • Software done in Shanghai
    • Lower development costs
    • Nearer to market
    • Design operations in U.S.
    • Chip design in U.S.
    • U.S. project mgmt expertise
    FABLESS SEMICONDUCTOR COMPANY
  • Example: Sina.com SRS
    • China
    • Chinese software developer
    • RichWin software
    • US & Taiwan
    • Leading Silicon Valley based web site
    • Target Taiwanese/American Chinese
    • Held #1 Chinese portal site
    • Multiple management leadership changes
    • Biz model transformation: software- portal - SMS, from software sales to ad revenue to paying subscription customers.
    • Transform from loss making into profitability through M&A and prudent management
    .net
  • Example: CSMC
    • Investment in 1998 as service company to manage a SOE fab
    • Biz transformation: full semiconductor fab company for the semiconductor industry in China
    • With an intact management team, it survived the Asian crisis, global semiconductor business down cycle, SARS and previous aborted IPO
    • In late 2003, raised US$70M pre-IPO round of funds with IFC as one of the investors. Currently on an IPO route.
  • Summary
    • Portfolio companies
      • Companies are stronger, has more committed management team and understand cash management
      • Management awareness of economic impact on business
      • Better relationships between Investors and management
    • Fund Management
      • Built stronger communications & trust between LPs and GP
      • Constant two way open dialog with good and bad news
      • Cross learning experience and ideas from various LPs
      • Opportunity for follow-up Fund
  • Thank You www.waldenintl.com