Private Equity Demystified WIM April 2012

WIM @ Bistro 42 . 20 April 2012

Ingenious

By William Du

Private Equity Demystified

Discussion Topics

Part 1: About Private Equity

Part 2: Raising Capital

Part 3: Ingenious Haus Group

Q & A

Advisory . Private Equity . Investor Relations

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About Private Equity

Investment Banking Services

Ingenious


Entrepreneurs’ Dilemma


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Pre-IPO

Expansion

Start-Up

Seed Concept

$

• Bright Idea

• Experimental

• Research

• IP Issue

• Business Plan

• Proof of

Concept

• Legal Entity

• Founders

• Mgt Team

• Commercialization

• Growth Strategy

• Revenue Model

• Support Functions

• Operations & Admin

• Finance

• Marketing

• Revenue Growth

• Corporate Strategy

• Brand Management

• Market Penetration

• Complex Corporate

Structure

The Stages of Growth of a Entrepreneur’s venture

Funding Needed in all stages

Time

Common Objectives of Fund Raising

Grow market share quickly.

Market expansion into new markets.

Product development to provide more products for customers.

Acquisition of assets / business.

Economies of scale.

Increase shareholders’ value.

Exit.


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What is Private Equity?

Private equity financing is long term capital investment that

helps companies to grow and succeed.

In ordinary share and / or preference share.

Return on investment depends on the growth and profitability of

the business.

Realization of profit on exit.


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Sources of Fund


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Bank loans

Seed Start-up Development Growth/ Expansion. M&A/Restructuring

Capital requirement

FFF

Business Angels

Venture Capital Fund

Corporate investors/

Large VC funds

IPO/ Capital Market

Mezzanine funds

Key Features


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Control

Private equity managers generally provide capital, in the form of

equity, debt or a combination of both, usually in exchange for a

sizeable stake in a business. Private equity managers will be actively

involved in managing the business together with the management

team to accelerate growth.

Expertise

Private equity managers also invest their expertise, i.e. in

management, finance, marketing, strategic direction, business and

personal networks.

Alignment of

Interest

By exercising some control through board representation, security

holder and management agreements, private equity seek to protect

and grow their investment.

Performance

This alignment of interests and the ability to add value to the

business often means that private equity fund may generate higher

returns than those available from traditional ‘hands-off’ investment

in listed shares.

Raising Capital


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Your Story & Business Model


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Competitive advantage

Economies of Scale

Market Share

Consolidator

Criteria for PE Investment

Price / Valuation.

Profitable and cash flow positive.

Strong track record of management team.

High potential for growth and earnings.

Strong brand name.

Compelling product / service.

Industry & market conditions.

Distribution channel and network.


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Investment Process


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Review Business Plan

Initial Enquiries & Negotiation

Due Diligence

Term Sheet Negotiation

Monitoring

Exit

Management team, business model, unique selling

point, marketing & financials.

Fact finding, interview, understanding, valuation,

proposed investment structure.

People, operational, legal, financials, patent &

copyright (if any), supplier & customers.

Fair value, investment structure, pricing mechanism,

corporate governance, termination clause.

Reporting system, board participation, milestones

development, corporate strategy.

IPO, trade sale, management buyout,

recapitalisation, write off.

Investor Relations

Role of Investors – active or passive?

Board of Directors & management team.

Corporate governance & disclosure requirement.

Shareholders’ agreement.

Minority shareholders' protection and rights.


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Private Equity’s Contribution


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0 5 10 15 20 25

Networking opportunities

Help with exit

Focus and support

No interference

Challenging status quo

Strategic advice

Sounding board for ideas

Financial advice and contacts

Source: CMBOR/EVCA

Corporate Profile . April 2012

About IngeniousHaus


Ingenious

We assist entrepreneurs to

secure capital required efficiently & wisely

with our expertise.

Established in 2004, Ingenious Haus is a registered venture capital management corporation under the

authority of Securities Commission of Malaysia.

We develop

simple, creative, reliable, effective ways

for you to build your business.

We work with entrepreneurs to develop strategic plans & business models. We provide independent

views and constructive advice to create value.


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We work with

rainmakers, market makers & kingmakers

to accelerate growth.

We partner with strategic investors, corporate & financial institutions to empower entrepreneurs with

smart capital in building their business.

We focus in

value creation & return on investment

for our stakeholders.

We provide long term wealth creation, accumulation & maximisation strategy for our investors. We

create stakeholders’ value with well defined investment & exit strategy.


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Scope of Services


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Deal Structuring

Fund Raising

Investor Relations

Funding Requirement

Going Public – IPO / RTO

Mergers & Acquisitions

Restructuring & Turnaround

Equity / Debt Capital Market

Financial Institutions

Private Equity / Venture Capital

Family Offices

High Net Worth Individuals

Corporate Communications

Investment Road Shows

Public Relations

Corporate Governance

Fund Under Management


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Ingenious Growth Berhad

December 2009

Portfolio:

V Telecoms Berhad

RM50 million

Ingenious Billion Berhad

February 2012

Portfolio:

ACE Credit (M) Sdn Bhd

RM25 million

Asia Media Growth Berhad

June 2012

Portfolio:

Media & Advertising

Social Media

Publishing

Content

etc

RM25 million

William Du

+6012 777 2388

[email protected]

No. 3.02D, East Wing, Menara BRDB, 285, Jalan Maarof, 59000 Kuala Lumpur, MALAYSIA

www.ingenioushaus.com


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Contact us if you

value intellectual, appreciate talent

respect equality & partnership.

The Star (22 August 2009)


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Go for Broke: Tales of Technopreneurship


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Business Today (May 2009)


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Vasseti (UK) PLC

Vasseti (UK) PLC IPO on the Frankfurt Stock Exchange (10 Oct 2011)


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Ingenious Growth Berhad

Launching of Ingenious Growth Berhad (12 Dec 2009)


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Welcome remarks by William Du, CEO

of Ingenious Haus Group.

En. Zulizman Abidin, Dr. James Chan,

William Du & Datuk Oh Chong Peng

At the Sunway Hotel & Spa Business

Meeting Room

Signing of shareholder agreement

between Ingenious & V Telecoms.

Exchange of agreement. Press Conference.

Partnership & Industry Participation


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Recognition award at Malaysia Venture Capital & Private Equity (MVCA) for fund raising activities – March 2011 & March 2008.

MoU signing with Nazrin Hassan, CEO of

Cradle Investment Program.

MoU signing with Stephen Chia, President

of Technopreneur Association of Malaysia.

Presentation of Islamic VC & PE Conference.

http://www.team.net.my/index.cfm

Private Equity Demystified WIM April 2012

Documents

investment banking services

ingenious haus group

private equity managers

william du

private equity

investor relations

rm25 million

management team