PHNOM PENH (Khmer Times) – Leopard Capital is looking at exit channels as the Cambodia-oriented private equity fund it launched in 2008 approaches its expiry date.
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The frontier markets investment firm launched its Leopard Cambodia Fund in April 2008 with $34 million in investment. The fund has made 13 investments – 10 in Cambodia, two in Thailand and one in Laos – and achieved three full and four partial exits.
Leopard CEO Douglas Clayton said the fund must exit all of its investments before the end of its eight-year lifespan in 2016.
“We’re now seven years into our fund and… have to sell everything by next year and return the money,” he told Khmer Times. “That’s not a reflection on Cambodia, it’s just the reality of how these funds are structured. They have a lifespan, and we’re in what they call the distribution phase.”
Last June, Leopard announced that it was seeking a strategic investor to purchase its controlling interest in boutique beer company Kingdom Breweries (Cambodia) Ltd. The investment firm acquired a 55.5 percent stake in the brewery for $2 million in 2009.
Kingdom Breweries was forecast to achieve sales of more than $10 million last year.
Mr. Clayton said Leopard is still seeking a buyer for the brewery, and is hoping to exit at least one other investment in Cambodia shortly.
He said the Leopard Capital Fund has achieved “mixed results.” On the positive side, the investment vehicle has achieved internal rates of return (IRRs) ranging from 10 to 50 percent on exits. But the remaining investments involve several companies that have struggled financially and could prove difficult to sell.
Mr. Clayton said he hopes the end result “will be sufficiently positive” to convince investors to roll their capital into a second Southeast Asia private equity fund. He said Leopard, which was a pioneer investor in Cambodia, has gained invaluable local knowledge during its time on the ground.
“We feel like we’re just getting started,” he said. “We have more knowledge now of [the local landscape] and know what to watch out for.”