Monthly Newsletter Issue 4 – August 2008

Leopard Cambodia Fund Monthly Newsletter Issue: #4

August / 2008



Welcome to the 4th Issue of the Leopard Cambodia Fund (LCF) Monthly Newsletter. As ever we wish to begin this newsletter by extending both a warm welcome and our thanks to those investors who have joined us over the course of the last month. Monthly closures continue with the next close taking place on the 29th August 2008. Please contact our Chief Operating Officer Thomas Hugger for offering documents, subscription forms and general enquiries at: [email protected].



Leopard Capital Welcomes VGZ Zurich

We are very pleased to welcome as an investor Markus Winkler of VGZ Zurich. Mr. Winkler has kindly agreed to serve as a non executive Director of our Feeder Fund, Leopard Cambodia Investments (BVI) Ltd. and will initially represent the Feeder on Leopard Cambodia Fund’s LP Advisory Committee. A Swiss national, Mr Winkler was educated at the University of Zurich and the Business School of St. Gall, from which he graduated. He is President of the Board of VGZ Vermoegensverwaltungs-Gesellschaft Zurich, an independent asset management company he founded in 1973. Prior to that he was trained at Bank Leu and UBS. He is a founder-member and former Vice President of the Swiss Association of Asset Managers as well as a founder and Board member of the Swiss Investors’ Association. He also serves on the Advisory or Supervisory Boards of a number of Dublin, Frankfurt and London listed funds investing in Asian and Eastern European emerging markets. Mr. Winkler is widely experienced in the investment world, and in addition to his professional commitments, is a regular lecturer and writer on investment matters. Mr. Winkler will be a valuable resource for our team and we are delighted to welcome him on board.


Portfolio News

The Manager’s Investment Team is in the advanced stages of evaluating two possibilities in the areas of agricultural production and processing, to capitalize on Cambodia’s underlying potential as a world-class food producer. The team is also considering opportunities in financial services, fast food, hotels, alternative energy, and various other sectors; there is no shortage of investment opportunities in Cambodia, and as the first multi-sector Fund, we hear about many of them.


Leopard Cambodia Investment Forum 18-19 September 2008: Phnom Penh   

We are now just 5 weeks away from the first annual Leopard Cambodia Investment Forum and the extremely encouraging rate of attendee registration provides yet further evidence of burgeoning interest in Cambodia. The forum will prove the ideal means of meeting our team and learning more about the many opportunities which the country offers. It takes place at the Raffles Hotel Le Royal in Phnom Penh on the 18th and 19th September. Invited speakers so far include:

  • HE Dr Hang Chuon Naron, Secretary General of the Ministry of Economics and Finance.
  • Kao Thach, head of the Cambodia Stock Exchange project, from the Ministry of Economics and Finance.
  • Tan Sri Dr Chen Lip Keong, President/CEO of NagaCorp Ltd.
  • Brett Sciaroni, Cambodia’s leading expatriate attorney.
  • Chan Sophal, Senior Researcher of Agricultural Economics at the Cambodia Development and Research Institute.
  • Sung Bonna, Managing Director of Bonna Real Estate.
  • Colin Low, National Executive for Southeast Asia Growth Markets, General Electric.
  • Stephen Bridges, former British Ambassador to Cambodia.
  • Svay Hay, Chairman of ACLEDA Bank Investment Committee.
  • Vantha Seng, Financial Director of Seng Enterprises.


We have blocked a number of rooms at the Raffles at a special conference rate of $110, but these are limited so please register soon. Please also take the opportunity to join our optional follow-on trip to Siem Reap where you can experience Angkor Wat and visit our condo project site.

To download the Forum’s documentation package (registration form on last page) please click HERE


Comment on Elections July 27th 


Cambodians went to the polls on July 27th and registered a resounding vote of confidence in Hun Sen’s Cambodian People’s Party (CPP). Results released by the National Election Committee show that the CPP won 90 seats in the National Assembly with 58% of the popular vote, up from 73 seats in the 2003 elections. And whilst noting some cases of alleged intimidation, the consensus amongst foreign media and NGO observers is that the elections were generally free and fair. The Sam Rainsy Party headed by the former Minister of Finance gained 2 seats for a total of 26 with 22% of the vote providing parliament with a credible, if small, official opposition. However, the fortunes of Prince Ranariddh’s former party and first post war Government FUNCINPEC waned yet further, losing 24 of its 26 seats. As a result of a 2007 change to the constitution which allows a party to form a Government with 50% of available seats, plus one seat more, the CPP can now govern without the need of a coalition partner. We expect Hun Sen’s business friendly reform agenda, which includes the active encouragement of foreign investment, to gather pace.



The Prasat Preah Vihear Temple Dispute   


The recent inter-Governmental spat over the provenance and legal ownership of a temple located on the border between Thailand and Cambodia, and the consequent deployments and counter deployments of troops, has reawakened memories most thought best forgotten, of the anti Thai riots of 2003 when the Thai Embassy in Phnom Penh was burned and the offices of many Thai businesses were ransacked. What bought these earlier riots about? A minor Thai actress was reported to have said she believed Angkor Wat to be Thai. Khmers hold Angkor Wat close to their national hearts and view the complex as the very symbol of their cultural identity, so the views attributed to the actress were seen by the Khmers as hugely provocative words from a daughter of a large and bullying neighbour. Relations between the two countries have always been if not delicate, certainly delicately managed. The roots of the current dispute go back to the 1950s when Cambodia was a French protectorate and French maps showed the temple as being on the Cambodian side of the border. Thai maps showed the opposite. When the French left Cambodia in 1953, the Thais, no longer facing a large western power, occupied the cliff on which the temple stands. Cambodia subsequently severed diplomatic relations with Thailand and lodged a complaint with the World Court in The Hague and in 1962 the court ruled that Prasat Preah Vihear belonged to Cambodia. The Thai King ordered that the Court’s decision be accepted and there has been a somewhat sticky but well managed and non violent truce ever since. Unfortunately, Thai domestic politics then came into play as parties opposed to the Government of Samak Sundaravej, (which they argue is effectively a proxy party part run by Thaksin Shinawatra), used the earlier acceptance by the Thai Foreign Minister of a slightly revised border map as evidence of the Samak Government giving pieces of Thailand away. Indeed Preah Vihear was included in a list of six items which opposition leader Abhisit Vejjajiva put before the Thai parliament when it met to vote on a no-confidence motion against the Government on June 26. Thailand’s Administrative Court has subsequently issued an injunction against the Foreign Ministry’s support for the Cambodian proposal to list Preah Vihear as a World Heritage site. Where do we go now? Probably not very far in the short term, there being no magic diplomatic bullets to fire at disputes where national pride is concerned. However, money talks and so do jobs, and Thailand is the 3rd largest south east Asian investor in Cambodia, a country crying out for foreign investment. Thai conglomerates such as Siam Cement might well think twice about proposed cement and steel investments if risks are deemed to be too great. Trade between the two countries reached $1.47bn last year: with a forecast FY growth rate of over 20%. That bilateral trade will be worth $1.75bn by year end, figures which will probably serve to concentrate Governmental minds on both sides. With both countries having much to lose, economic ‘realpolitik’ may well dictate that a compromise is reached sooner rather than later.




In the News 

  • In joint projects with Qatar and Kuwait, Cambodia plans to invest $300m over the next few years to dam the Vaico and Stung Sen rivers with a view to increasing the amount of rice paddy under irrigation from 44% to 60%. This follows earlier announcements of preliminary agreements between the respective Governments through which Kuwait and Qatar seek to secure rice supplies from Cambodia. Cambodia had a rice surplus of 2m tons in 2007.
  • Cambodia’s first steel plant, the Ti-E Steel Cooperation Company has commenced production. The factory, which had a ‘soft opening’ in early 2007 is located on over six hectares in Meanchey district, Phnom Penh and has a 25,000 ton capacity. Cambodia’s demand for steel is running at around 200,000 tons per year.
  • Chinese firm Global Taxi has begun a metered taxi service in the capital a year after it signed an agreement with City Hall. The first 12 taxis are now plying the streets of Phnom Penh with 48 more to be introduced later this year.
  • The Ministry of Commerce has announced that garment exports increased by 5 percent in the first half of the year and are expected to grow to 10 percent by year’s end. The Garment Manufacturers Association of Cambodia reported earlier this year that garment exports totalled US$2.93bn billion last year, 2 percent higher than 2006’s US$2.88bn.
  • Despite the ongoing Preah Vihear border dispute, tourist arrivals to Cambodia were up by 13 per cent in the first half of 2008, Ministry of Tourism statistics show. The Ministry said nearly 1.1 million foreigners had visited the country in the first six months of the year, an increase on 2007, when total annual tourist arrivals topped 2 million for the first time.



Revised Terms of Leopard Cambodia Fund

Subject to approval by the LPs, the GP proposes to shorten the term of the fund to better reflect the promising current investment conditions. Currently the Fund is structured with a 5 year investment period followed by a 5 year divestment period. With an abundance of attractive investment opportunities coming our way, the GP proposes to reduce the Fund’s 10 year lifespan to 8 years: 4 years investment followed by 4 years divestment. LPs will receive a separate document to vote on this.


Feeder Fund: A Possible Listing in Frankfurt?


The directors are to consider listing Leopard Cambodia Investments (BVI) Ltd., our Feeder Fund on the “Open Market” of the Frankfurt Stock Exchange (Germany) on or after the hard close (31st March 2009) and, before reaching a decision, will seek the views of investors as to the merits, or otherwise, of such a listing.



New Staff

We welcome on board Matt Magenheim who has joined our Phnom Penh office as Business Development Manager. Matt joins Leopard from the William J. Clinton Foundation where he had served as Cambodia Country Coordinator of the Clinton HIV/AIDS Initiative, a position which took him to all corners of rural Cambodia. Matt earlier set up a meat exporting business in Ulaanbaatar, Mongolia for Projects International, and worked as an investment banking analyst at Morgan Stanley. He received his A.B. summa cum laude from Bowdoin College and is a recipient of the Royal Government of Cambodia’s Sahametrei Medal.





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contributed by Jason Poh 

summer 2008 Leopard intern  


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In this Issue 

VGZ Zurich Invests

Portfolio News

Investment Forum

Comment on Elections

The Temple Dispute

Listing in Frankfurt?


Quick Links 


Leopard in the News 

Articles containing information and comment on both Cambodia and on the Leopard Cambodia Fund appear regularly in various publications and news outlets. To view the page in our website displaying links to these click HERE



The NAV of Leopard Cambodia Investments (BVI) Ltd. was as of 31th July USD: 1’002.40 (30th June: USD 1’001.92)


Leopard Cambodia Fund


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Leopard Cambodia Investments (BVI) Ltd. 

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