0. VENTURE CAPITAL PARTNERSHIP CONFERENCE NOVEMBER 1, 2 0 0 1 HONG KONG
Prepared by Pantheon Capital (Asia) Limited
Regulated by the SFC

1. The Players’ Roles Asian Private Equity / Venture Capital Market

2. The Pantheon Group
A specialist investing in private equity/venture capital funds globally
Our role is to channel international capital into the most attractive opportunities in the private equity/venture capital market
18-year track record with long-term outperformance relative to benchmark indices
Over US$5 billion under management
Has been investing in Asia since 1985

3. Drivers for Private Equity Success
Relationship based on equity
Global context
Time
Corporate governance

4. The Private Equity Industry
Fund Managers:
Expansion stage
MBO
Distressed
Pre-IPO
Early stage
Capital “+”
Capital
Entrepreneurs/ Management
Investors
Profit & Capital
Profit & Capital

5. Types of Investor Fund of funds and “gatekeepers”
Government and quasi-government agencies
Public pension funds
Insurance companies
Companies
Charitable foundations
Corporate pension funds
Private family groups
Private individuals

6. Asset Classes Investors’ Choices Bonds Equities Alternative Assets
Government
Corporate
Equities
Domestic
Asset
Classes
Foreign
Alternative
Assets
Private Equity
Hedge
Others
Property
Commodities
Cash

7. Overview of Investor Requirements
Top down and bottom up…

8. The market is segmented…
Types of Fund Managers
The market is segmented…
Expansion stage:
Financing companies’ growth sharing the upside with entrepreneurs
MBO:
Help entrepreneurs to solve succession issues
Give liquidity to entrepreneurs
Corporate divestment of non-core activities
Distressed:
Help to regenerate businesses through debt restructuring
Pre-IPO:
Bridging financial requirements before IPO
Early stage:
Give direction to a young team
Infrastructure support
Finance new business generation

9. Understanding how value is added
Operating improvement
(Restructuring of under-performing businesses)
Leverage Business Growth
(Cash flow (Selection of
management and growth/market
financial engineering) opportunities)
PE “magic”
(Buying cheap and exiting in a bull market)
Value
Creation

10. Entrepreneur’s Considerations
Thorough due diligence is a must:
Is the fund manager passive? Preference for active fund manager?
Does the fund manager understand my business?
Are the fund manager’s expectations achievable?
Corporate Governance
Financial
Business direction
Exit avenue for investor
Is my interest aligned with the fund manager’s? (Remember fund manager needs to exit!)
Will I enjoy spending the next few years with this group of people?

11. PRIVATE EQUITY INVESTOR IS A PARTNER NOT A BANK
Conclusion
PRIVATE EQUITY INVESTOR IS A PARTNER NOT A BANK
PICK THE RIGHT PARTNER