Leopard
Cambodia Fund
- Monthly
Newsletter Issue 17 - September
2009
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Announcing
Leopard Sri Lanka Fund
Leopard
Capital is pleased to announce the launch of Leopard Sri Lanka Fund
LP in early 2010. After several decades of civil war, peace has
finally returned to the beautiful island of Sri Lanka, and a new
investment cycle and growth upswing has begun. Leopard Sri Lanka Fund
will provide expansion capital and strategic guidance to mid-market
Sri Lankan companies, and also help some expand their businesses into
other frontier economies. Leopard Sri Lanka will be led by
Colombo-based investment experts Nirosh De Silva and Ramanan
Govindasamy, backed by the growing resources and experience of
Leopard Capital and Leopard Cambodia. To learn more please email
our group marketing manager Mohamed Aslam, [email protected].
Leopard Sri Lanka Investment Forum 2009
Potential investors are invited to attend the
inaugural Leopard Sri Lanka Investment Forum 2009 November 20-21 at
the Cinnamon Lakeside Hotel in Colombo, Sri Lanka. An impressive
line-up of speakers will present the exciting investment
opportunities emerging in this post-conflict economy. Don't miss this
chance to get in early in another transitional market. For more
details please email Mohamed Aslam above.
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Leopard
Cambodia Fund Update
Our
newest investor lifts Leopard Cambodia Fund LP ("LCF")'s
size to USD 28,655,000. We are also delighted to hear that
several of our LPs are considering increasing their earlier
commitments. Meanwhile our investment team has just sent up another
round of investment proposals to our Investment Committee, and
another drawdown may lie ahead. Looking through our investment
pipeline, our targets of opportunity vastly exceed our Fund's dry
powder so Leopard Cambodia Fund remains open for new subscription
through December 2010. Over the next two weeks Doug Clayton will be
visiting prospects in Chicago, Milwaukie, Boston, New York, and
Singapore; if you'd like to meet up anywhere let Aslam know.
LCF Portfolio
Notes
Having
signed its lease of the former Nestle factory and surveyed the
premises, Kingdom Breweries ("KB") will next start to clean
up and renovate the building, and a crew is being assembled for
this. KB's CEO, Peter Brongers has set up his office at the
site, which includes a 3 story office block. Peter has
recruited several local staff and he and KB chairman Jim Napier have
started interviewing a shortlist of brew master candidates from a
long global list of experienced applicants who responded to some
brewing publication ads. Meanwhile, Cambodia Plantations is
awaiting completion of an external Environmental Impact Assessment,
the next step in finalizing its land concession. Greenside
Holdings' power grid construction should be completed soon, but
anyway our monthly interest payments continue to arrive on
schedule. Up in Siem Reap, the road crew at Angkor Residences
awaits the end of the rainy season to complete the access road
upgrade project.
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Jazz Gill joins
Leopard Capital as Associate Partner focusing on technology and
telecoms investments. His career includes 19 years of
operational experience as an entrepreneur, CEO or senior executive at
firms ranging from start-up ventures to established multinationals
such as Motorola and Global Crossing. Jazz holds a MBA from Imperial
College and is based in London.
Lawrence Mackhoul joins our Phnom Penh office on a three month
internship. A MBA student at Georgia State University's
Robinson School of Business, Lawrence grew up in Honduras and headed
a real estate investment company in Atlanta.
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Leopard Capital has
been invited to address two upcoming conferences in Singapore,
where we hope to see some of you.
AVCJ Private
Equity and Venture Forum Southeast Asia 2009 will be
held at the Fullerton Hotel Singapore Oct 7-9. This year's
theme is "Opportunities in Asia's Emerging and Frontier
Markets", and you can contact [email protected] to
register.
Tonkin Corporation's Capital
Raising Asia 2009 conference will be held November
23-25 at M Hotel, Singapore. The Conference aims to help
companies plan their fundraising strategies and will include a
post-conference workshop on mastering the IPO process. Click here for the program agenda, or
email [email protected]
to register.
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- Thailand
will fund a $41 million upgrade of National Road 68 in
Cambodia's Oddar Meanchey and Siem Reap provinces which will
help facilitate border trade.
- Cambodia's
strategic relationship with USA seems to be warming, with 1,500
US troops planning to come to Phnom Penh next year for a joint
military exercise.
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As of
this month Cambodian rice exports to the EU are now duty-free,
under the "Everything But Arms" initiative.
Since the program excludes Thailand and Vietnam, Cambodian
millers now have an advantage.
- The
IMF now projects 4.25% Cambodia GDP growth in 2010 following an
expected 2.75% contraction in 2009. Tourism is already
picking up a bit.
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Visit Notes:
KOH TONSAY, by Douglas
Clayton
Since few outsiders
have been to them it's easy to forget that Cambodia has over 60
pristine islands dotting its coastline. I've been curious to
investigate the Cambodian answer to Robinson Crusoe question:
how do people make a living on an undeveloped tropical island?
When I hear that locals are farming seaweed on Koh Tonsay (Rabbit
Island), and I decide to go check it out.
I bring along our trusty driver Sam, and at the small pier in Kep and
we negotiate a boatman to take us out for the day for
$20. He leads us to a long, open. "long-tail"
boat, which I notice lacks any life preservers or radio, but it does
have a red police light mounted on a frame which I guess makes it
safe. The boat slices through the waves with surprising
stability, and after a 25 minute ride we are jumping off at Koh Tonsay.
Tonsay's main beach is long and nicely decorated with tall coconut
trees. Side by side along the beach are six bungalow operators, each
offering a dozen simple huts for intrepid travelers. "You
get what you pay for" is a travel truism, and here $5 gets you a
roof and walls of woven palm fronds (eco-friendly!), without
unnecessary 5-star frills like electricity, fan, or mosquito nets (no
carbon footprint!) However one operator's sign advertises their
bathrooms have toilet paper, which seems a promising start and
perhaps for now gives them a massive competitive advantage. I
decide my wife might not be enthusiastic to spend a holiday in one of
these huts, although I notice a dozen or so guests contentedly
reading their Lonely Planet guides along the beach.
Sam and I set off to hike around the island, which has zero
automobiles but one muddy cowpath/trail. The trail circles around a
150 meter tall mini-mountain that occupies most of the island's
interior and is lushly carpeted by jungle. After mucking down the
path for 20 minutes, we reach a second, smaller beach, which holds
only a few randomly placed fishermen's shacks but no seaweed farms or
bungalows.
Next to one hut we watch a woman chopping up some fish with one hand
while rhythmically shoeing away a grunting sow with her other hand;
the smell of fish guts is making the pig quiver with excitement and
it looks tempted to just dive in. Nearby a teenage girl sits in
jeans under a mango tree watching three piglets root around a pile of
old coconut shells. Although she's living on a idyllic tropical
island paradise, the girl looks bored, like teenagers everywhere. I
briefly wonder if she has ever attended a school, as I don't see any
schools or health clinics to serve the 50-100 people living out
there. But they do have access to 3G cell phone coverage, as I
discover when my phone suddenly rings; it's my wife checking if I've
put on sunscreen which of course I've forgotten. The sun is
getting scorching now and I realize I am getting fried, but no one is
selling anything like lotion on this island.
Soon I'm getting scratched up as well as the trail winds back into
the jungle and we have to stoop low to pass under thorny
branches. Furthermore my new sandals begin to blister my
feet. Sam, a rugged Cambodian war veteran, seems comfortable
moving through the jungle although I suspect he wishes I had issued
him a machete to carry instead of a wimpy rolled-up umbrella.
Finally we reach the seaweed area, so here's the context. In
the past islanders subsisted by catching fish, raising some animals,
and picking coconuts and mangos. Over the past decade they've
learned to supplement their income by not only renting out bungalows
to backpackers but also by farming Eucheuma cottonii seaweed.
The seaweed gets processed into carrageenan, an ingredient in all
sorts of popular products from ice cream to toothpaste to
"personal lubricants". I see hundreds of plastic bottles
bobbing in the warm shallow waters off the back of the island; the
bottles buoy a grid of nylon lines on which eucheuma is
planted. After a few months it is harvested by pruning and sun
dried on long homemade tables onshore, before being sold to a
Malaysian company that supplies it to the US. In one area, I watch
local women sorting seaweed and exchanging gossip (see photo
below).
We resume our march and pass by a simple concrete box, windowless
except for a slit on one side. At first I think it's a water
storage tank donated by a NGO, but Sam tells me it's a military
bunker, which must have been built by the Khmer Rouge regime in 1975
when they were launching commando raids on nearby Phu Quoc island to
try to seize it from fellow communist Vietnam. The bunker is
the only historical building we see on Koh Tonsay. Suddenly the
trail ends abruptly at a shack with a small private beach. Four
kids are splashing around in giant life vests that seem as tall as
them, while their father sits on his porch, smoking a cigarette and
watching the seaweed grow. Sam asks him for a boat lift back to
the main beach and he quotes us a hefty $6 for the short ride;
clearly he has stumbled on a steady income stream simply by locating
his house at the end of the trail. He delegates the ferrying
task to his teenage son who is lounging nearby on a hammock, and the
boy reluctantly bails out their little boat which is alarmingly full
of water. We set off in the wobbly craft and the engine dies
within minutes, but the boy somehow gets it restarted and finally
delivers us intact.
Like most of Cambodia's better islands, Koh Tonsay has been awarded
as a long term concession to a local business group, so one day it
will probably have some boutique hotels on it, and all the seaweed
sorters will be wearing housekeeping uniforms and their husbands will
be pushing lawnmowers. But I'm glad to have seen it as it was, and
still is.
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Picture of
the Month: The Seaweed Sorters, by Douglas Clayton
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This document does not constitute an offer to sell,
or a solicitation of an offer to invest in Leopard Cambodia Fund LP
and/ or Leopard Cambodia Investments (BVI) Ltd. (collectively,
"our Funds") We will not make such offer or solicitation
prior to the delivery of a definitive offering memorandum and other
materials relating to the matters herein. Before making an
investment decision with respect to our Funds, we advise potential
investors to read carefully the respective offering memorandum, the
limited partnership agreement or operating agreement, and the
related subscription documents, and to consult with their tax,
legal, and financial advisors. We have compiled this information
from sources we believe to be reliable, but we cannot guarantee its
correctness. We present our opinions without warranty. Past
performance is no guarantee of future results. � 2009 Leopard
Capital LP. All rights reserved.
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Leopard in the News: Media
articles about Leopard Cambodia Fund and Cambodia are posted on
our website; click here.
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The NAV of
Leopard Cambodia Investments (BVI) Ltd as of 30th August 2009
is USD 1,012.76 (31st July 2009 USD 1,012.04)
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Investing
in LCF via a Self Invested Personal Pension Plan (SIPP):
UK taxpayers can
invest in LCF via a SIPP and enjoy certain tax advantages.
Hornbuckle Mitchell
is our SIPP provider:
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Leopard Cambodia Fund, LP
Fund
size:
USD
28,655,000
ISIN No:
KYG5458L1023
CUSIP
No:
Valoren
No:
Bloomberg:
Lipper
ID:
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Leopard Cambodia Investments
(BVI) Ltd.
Fund
size:
USD
18,380,000
ISIN
No:
VGG5458M1005
CUSIP
No:
Valoren
No:
Bloomberg:
Lipper
ID:
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