Leopard Cambodia Fund Monthly Newsletter Issue: 5 – Investment Forum Special
September / 2008
Welcome to the 5th 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 one taking place on the 30th September 2008. Please contact our Chief Operating Officer Thomas Hugger for offering documents, subscription forms and general enquiries at: [email protected].
Revised Terms We are pleased to announce that after consulting the limited partners (LPs) of Leopard Cambodia Fund L.P. (fund), 79.54% of the capital of the fund has agreed to change the terms from previously 10 years (with the option to extend up to two consecutive one-year period) to new 8 years (option to extend remains unchanged).

Leopard Cambodia Ltd. as the manager of the fund proposed the change of term to 8 years having concluded after due deliberation that the substantial and increasing number of viable investment opportunities being made available to the fund offer the managers a realistic expectation of achieving full investment after four, not five years.
Smart Trade or Good Investment?

Such was the question posed by Leopard Capital Partner Gordian Gaeta to the 103 investors and potential Investors from 18 countries who attended the opening session of Leopard Cambodia’s first annual Investment Forum held on the 18th and 19th September at Raffles Le Royal Hotel in Phnom Penh. Former strategic adviser to Standard Chartered Bank and veteran of 25 years private equity experience in Asia, Gordian posed this rhetorical question as he sought to draw the distinction and compare the risks between the quick (and indeed sometimes profitable) trade, and the carefully constructed portfolio of direct investments which private equity houses make. Both are valid strategies of course, but Gordian left investors in no doubt as to which he prefers, and at the end of two days of extremely high quality presentations, investors made their preferences known too. Even allowing for the obvious fact that the audience was PE inclined, the Leopard Capital team was heartened!

Gordian Gaeta
HE Dr Phan Phalla of Cambodia’s Supreme National Economic Council set the scene by describing the economic backdrop to the country, pointing out high GDP growth (10% pa over 5 years), huge tourist arrival numbers (now 2m and growing at 15-20%), increased investment in health and education, and an improving regulatory system. His (official) upbeat assessment of the business and economic environment was strongly supported by hands-on businessmen such as Stephen Higgins, CEO of ANZ Royal Bank, who surprised many when he said that ANZ’s Cambodia branch network was their largest anywhere outside of Australia or New Zealand. In his words “you don’t achieve that unless the country is business friendly.” With loan growth of 100% in 2007 supported by 60% growth in the number of deposit account holders, NPLs at 2.4% down from 10% in 8 years, and a legal system that is “one of the better in Asia” (caveat-yet to be fully tested), Stephen made clear his confidence in the Bank’s future. Michael Stephen, Chairman of the Cambodia Mekong Bank shared this overall bullish view of the banking environment, describing the regulator – the National Bank of Cambodia – as a greatly improved and improving central bank.
Phan Phalla

Further confidence in the overall environment and in particular the legal framework, was shown by long term resident Brett Sciaroni, Phnom Penh’s leading foreign lawyer and advisor to Prime Minister Hun Sen. He described how easy it is to acquire a work permit, how there are no restrictions on the transfer or repatriation of funds, and how foreigners are permitted to own 100% of a business. Whilst lauding the 1994 Investment Law which amongst other things prohibits nationalisation and makes provision for the sale of 70 year leases with a 70 year option to foreigners, Brett made the point that implementation of some laws is an issue, as can be dispute resolution: lesson (re)learned?…..due diligence, due diligence, due diligence. Leopard Cambodia conducts much of its due diligence through Sciaroni and Associates in their capacity as the company’s lawyers.

Further due diligence advice comes from Leopard Partner Stephen Bridges who for four years serving as British Ambassador to Cambodia gained a tremendous understanding of both the country and of the people. Now MD of leading mining explorer Queens Property and Resources, Stephen gave the audience a clear and detailed breakdown of the minerals situation in Cambodia, quoting a United Nations report which, pun unintended or not, described Cambodia as a ‘goldmine’ with gemstones and phosphates to the west, iron, copper, lead, zinc and bauxite to the north, copper and gold in the centre of the country and oil and gas offshore. Describing Cambodia’s desire NOT to be the “shrimp between two whales” (Thailand and Vietnam) and its consequent desire to grow, Stephen made clear his confidence in the business environment, citing consistent Government strategy and no policy flip flops; prerequisites for foreign investors.
Stephen Bridges

Jean-Boris Roux, MD of RM Asia reinforced this point—and then demonstrated just how Cambodia provides this consistency by pointing out that his company, which acts as sales distributor for brands such as Ford and JCB, has been in Cambodia since 1991 and is now so profitable that it funds the expansion of RM Asia in other parts of the region. With 500 employees RM has found quality in the local workforce. The number 2 in the company is Cambodian and they have found the level of spoken English to be better than in neighbouring Thailand and Vietnam.
Jean-Boris Roux

Timothy Purcell of Agricultural Development International, Chan Sophal of the Cambodia Development and Research Institute, and Michael Lambert of the Central Asia Development Group, gave a combined agricultural view. CADG chose Cambodia over both Vietnam and Thailand, as land prices in Cambodia are 1/3rd cheaper than its neighbours. Stability and continuity of policy were also factors in their decision. Lack of any real food processing in the country was pointed out by all three speakers and this was seen as an excellent sector for investment. With 99 year agricultural leases available to foreigners and some of the richest soil in Southeast Asia (Cambodia jasmine rice sells at a premium even to Thai jasmine), all three speakers saw great futures for their respective companies.
Timothy Purcell

Pierre Tami presented Hagar International, a much respected charitable development company driven and financed by the profitability of its soya milk and catering businesses (yes, such models really do exist in the CSR world). Erik Middlewink of SME Renewables, a leader in rural biomass gasification, and leading estate agent Bonna Realty also made presentations. From Kao Thach, Deputy Director General of the recently formed Securities and Exchange Commission came a clear explanation of Stock Market developments.

The forum wound up with a talk from Vantha Seng, CFO of Seng Enterprises, partners with Leopard Cambodia in the fund’s first investment; a 250 unit, tourism-oriented condominium project in Siem Reap, service town to the 1.5m annual visitors to the 8th wonder of the world: Angkor Wat.
Social events both evenings, and a post-Forum weekend trip to Angkor Wat gave attendees a chance to experience more of Cambodia and to bond with the Leopard Team.

So, we come back then to Gordian’s question: “Smart Trade or Good Investment?” There was a discernable shift of attitude over the course of the two days. Cautious interest gave way to some confident enthusiasm, detailed questions abounded and many highly experienced Asian investors seemed to have placed Cambodia within their subjective basket of Asian investibles. When the conference ended and the Leopard Team said au revoir to the 103 attendees, it seemed many left Phnom Penh believing Cambodia did indeed constitute that very good investment.
Please note that the presentations delivered at the Forum are available as downloadable PDF documents, by signing up as a Member of our website.

Leopard Capital at the CLSA Forum
Partners Doug Clayton and Thomas Hugger will be presenting to several hundred more potential investors at the prestigious CLSA Investors Forum in Hong Kong on September 24th. Jointly with CLSA, Leopard Capital CIO Ken Stevens has written Cambodia’s most substantial and most detailed investment research document yet, entitled “Cambodia’s Ascent-Catching Up with the Neighbours.” Clients of CLSA will receive hard copies.

And some ‘Asianomics’  
Clients of CLSA will know that Asianomics are Dr. Jim Walker’s acute observations and commentary on Asian economies. Consistently ranked the leading economist in Asia for an almost embarrassment of years, Jim has left CLSA and runs his own Economic Research house in Hong Kong called Asianomics Limited (www.asianom.com). He will soon be publishing a piece on Cambodia. As a preview, read some “Wee Bits” here. Jim is a Leopard Capital Partner and a Non-Executive Director of Leopard Cambodia Fund LP.

New Team Members
We are excited to welcome several additions to the Phnom Penh team. Nat Meechubot, Tony Socheat Sunly and Tep Vichet have joined, bringing our team of associates to its full strength of five. In addition, Norng Chan Sopheak recently began as our Receptionist.

Nat was a successful entrepreneur in the retail industry in the US and Europe prior to joining Leopard Capital. He previously served as an investment banking analyst at JPMorgan Chase in New York and at Advance Finance, a Lehman Brothers management buyout in Bangkok. Nat received his BA in Economics and French at Tufts University and his MBA from the University of Southern California’s Marshall School of Business. He has lived in eight countries and is fluent in English, French and Thai.
Nat Meechubot

Tony was born in Phnom Penh and is returning to his home country after 20 years of living in the United States. Prior to joining Leopard, he served as a private equity analyst at Spinnaker Capital LLC, a Boston-based investment firm, where he helped evaluate, analyse, and monitor the firm’s investments in private companies and funds. He earlier held internship positions at Goldman Sachs and PricewaterhouseCoopers. Tony holds a BSM (Finance and Accounting) from Boston College and is fluent in Khmer.
Tony Socheat Sunly

Tep Vichet was founder and Managing Director of Cambodia Japan Support, an independent business consulting firm supporting Japanese investment and market research in Cambodia. He spent nine years in Japan where he worked as a Public Relations Officer in the Royal Cambodia Government’s Consulate in Nagoya after earning a Masters of Law from Nagoya University, and a Bachelor of Law from Osaka University. Vichet is fluent in Japanese, Khmer, and English.
Tep Vichet

Sopheak most recently worked for WELS Academy Cambodia and prior to that, the PSE Pour un Sourire d’Enfant, a vocational training center, where she also attended high school. She has completed internships with the Food and Agriculture Organization of the United Nations and Vision Fund Cambodia. She is presently completing a Bachelor’s degree in Finance Accounting from Phnom Penh’s Vanda Institute of Accounting.
Norng Chansopheak

In this Issue
First Investors’ Forum
Leopard at CLSA
And some “Asianomics”
New Team Members
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 29th August USD: 1’002.94 (31st July: USD 1’002.40)
Leopard Cambodia Fund
CUSIP Number
Valoren Number
Bloomberg Code
Lipper ID

Leopard Cambodia Investments (BVI) Ltd.
ISIN Number

CUSIP Number

Valoren Number

Bloomberg Code