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9:00 (Part I) Introduction and overview of investment and legal strategy in cleantech funds
Facilitated by:– Christopher Tung, Partner, K&L Gates, Hong Kong – Christopher Bongars, Founder & CEO, SustainAsia, Hong Kong
10:00 (Part II) Setting up a parallel fund structure in Hong Kong and China
Facilitated by:– Michael Chan, Partner, K&L Gates, Hong Kong – James Chen, Partner, K&L Gates, Taiwan
11:00 (Part III) Opportunities and risks for funds in carbon trading and finance
Facilitated by:– Christopher Tung, Partner, K&L Gates, Hong Kong – Rutger de Witt Wijnen, Partner, De Brauw, Netherlands– GeertPotjewijd, Resident Partner, De Brauw, China
SustainAsia selects and assists high-potential technology and service companies in the clean & green technology and eco-efficiency sectors to accelerate their growth in the Asia Pacific region.
Research, evaluate, execute & exitSustainAsia advises financial services and investment groups on investment risks and opportunities in clean & green technology, energy and environmental infrastructure in the Asia Pacific region.
As a technology and industry expert, SustainAsia provides research and transaction services for the independent assessment and due diligence of targeted companies during private equity investment and merger & acquisition transactions.
The designation “clean technologies” (“CleanTech” in short) are used interchangeably to designate solutions, products or services with innovative and high knowledge content, aimed at optimizing the use of natural resources (water, energy, raw materials, etc.) and reducing their ecological impact – for instance the quantity of greenhouse gas emissions, also known as ‘carbon footprint’ – while adding economical value:
AgricultureBio-materials and organic products (e.g. eco-textiles)Micro-irrigationNatural pesticides and bio-fertilizersBio-fuelsClimate change adaptation technologies
EnergySolar PhotoVoltaic (PV) Concentrated Solar and Solar ThermalWindBio-mass, bio-gas, waste-to-energyHydro (small & medium), geothermalSea wave and currentTransmission & Distribution ('smart grids')Fuel cellsUltracapacitors and batteries (storage)Energy efficiency and low carbon (solutions & services)
Industry and ConstructionMaterials (including recovery and recycling)Green ChemistryNew generation sensors & wireless solutionsHeat pumpsConstruction materials (isolation, BIPV)Green buildings (LEED certified)
Cleantechisa youngindustry. Today the main bulk of investments in innovation and intellectualpropertyisstilloccuring in Europe and NorthAmerica. This trend willstartreversing in the years to come, with the rise ofcleantech‘champions’ in Asia Pacific exportingtheirown technologies
Cleantechsolutions: a global market.Asia (and China in particular) isalready a formidable platform for the manufacturing and exporting of highlycompetitiveCleantechproducts to international markets. In parallel, givenitsrapideconomicgrowth, the demand for Cleantechproducts& services inAsiaisstrong
Technologytransfersare accelerating.Cleantechcompanies are actively seeking an international presence through strategic M&A transactions.
The identification of strategic&technological gaps is a key aspect of the anyfundinvestmentstrategy
Avoidance of hot sectorsover-invested or over-subsidized
Regional mandate: Asia, Australasia, South Asia, ASEAN
Country-focus: China (or greater China), India, Korea, etc.
Fund raisingFund Size and Currency Denomination (onshore/offshore)
Investors Profile (institutionals, family offices, individuals)
DealflowIntermediated vs. proprietarydealflow (local and global network)
Internalvs. outsourced PE research and analysiscapabilities
Balanced vs. sectorspecific (cleantech) focus
Clean energy(Clean Energy = RE/EE) % allocation
Supplyside = RenewableEnergy (RE) and demandside = EnergyEfficiency (EE) and otherclean energy (lowcarbon) projects and climate mitigation and adaptation technologies
Othercleantechsectorsin Agriculture, Industry& Construction, Transport, Water includingnon-energyrelatedClimatech % allocation
Early/growth stageunlistedcompanies of the industrialCleantechsector focus. High value addedProducts and/or Services in the value chainwith a leadership positionin theirdomesticmarket and with a clearinternational developmentstrategy
Profile of targets
Technology companies, equipment manufacturers, distributors and installers, engineering service companies, project developers, EESCOs, project specific special purpose companies, independent power producers, energy and water utilities or end users, etc.
AmountinvestedTransaction size and limits (% of the Fund size per transaction) Series A ou B (or later) Shares? Possibility of co-investments ?
% of participation
Minority or majoritystake? Governancecriteria: representation and veto powersat the board
Number of investments
Numberinvestmentsper yearover the investmentperiod (extension?)
Investmentperiod and Type of exit
Trade sale to strategicinvestoror financialinvestor (later stage rounds withothercleantech PE fund) or IPO (onshore/offshore)
A clear investment strategy with a systematic approach to adding value through the entire investment process and delivering high returns to investors
A well targeted positioning to capture Cleantech emerging opportunities and to address high value strategic and technological gaps through a global network of professionals and partners
Strong combination of experience and skills: a unique and diversified team with deep industry expertise, local knowledge and all the skills needed for quality investments
Active and credible sponsor with solid track record: a long established presence with a proven infrastructure
A rigorous investment methodology: systematic, robust and responsible investment selection, execution, management and exit processes
Balanced investment opportunities: access to an on-going diverse and proprietary deal flow
Optimized investment structure: a transparent and safe investment vehicle with full management and advisory capabilities in the selected geography
Advisory or Supervisory BoardSponsor + Strategic Advisors + Nominees of Investors (Limited Partners)
Advisory or Supervisory BoardSponsor + Strategic Advisors + Nominees of Investors (Limited Partners)
External Advisors & Experts
LegalAdvisor
Financial Advisor
Auditor
+ Industry Experts by
theme (depending on
targets)
External Advisors & Experts
LegalAdvisor
Financial Advisor
Auditor
+ Industry Experts by
theme (depending on
targets)
Investment & Management Team (full-time professionals)
Dedicated Partners for origination, transaction & exit, plus fund raising and investors relations) + dedicated team for Research, Analysis & Investment Management and Execution of investment & divestment
transactions
Investment & Management Team (full-time professionals)
Dedicated Partners for origination, transaction & exit, plus fund raising and investors relations) + dedicated team for Research, Analysis & Investment Management and Execution of investment & divestment
Internal Due Diligence Revised Project ReportTerm Sheet (DRAFT) and Preliminary Investment Decision*Negotiation of Terms & Conditions with Target
Step 3: Closing
Internal & External Due Diligence (Legal, Financial, & Industry Review)Term Sheet (FINAL) and Final Investment Decision*Closing Transaction (Documentation)
Approval
Step 4: Management
Participation to the Board and Provision of Strategic GuidelinesSupervise Key Mngt StaffStrategic Decisions (by monitoring committee)*Quarterly Reporting
Step 5: Exit
Review exit optionsDivestment Decision*Implement exit options and distributions
* Each stage of the investment process requires prior approval of the Investment
CommitteeApprova
l
Approval
Approval
Investment criteria (stage, size, sector, company profile)
Commercial Factors
Financial Factors
Non-financial factors (including governance and Responsible Investment policies, if
SustainAsia is providing consultancy services to accelerate the market entry into Asia, of an innovative water disinfection technology company, through extensive market assessment, business planning and implementation, identification and selection of strategic partners, as well as identification of 'early adopters'.
Access to Asian market, initial promotion and representation steps, setting up distribution channels and demonstration project. Introduction to leading industry players.
“We approached SustainAsia to help initiate and build our base and distribution network throughout China and South East Asia. SustainAsia’s deep knowledge of the region, its water industry, the business culture and their wide network of relationships were key factors in our successful launch and our flourishing business in Asia”
SustainAsia provides independent and confidential technical and operational reviews, before, during and after construction of the project, to ensure that the design, construction, operation and management systems \are meeting applicable internationally recognized standards
SustainAsia provides the necessary due diligence and audits for assessing operational risks, execution risks, as well as the implementation of cutting edge eco-efficiency practice
Fact findings and independent assessment of the growth opportunities as well as technology, industrial and operational risks faced by the investors. Validation of key assumptions in the financial model
SustainAsia is mandated by several private equity investment and asset management firms to conduct independent assessments and due diligences of several clean technology companies in China, prior to a growth capital expansion transaction.
Our due diligences comprise site visits, interviews with management, technical auditing and market assessment, report on observations, analysis and recommendations, and contribution to the investment memorandum.
Independent and unbiased expert opinion, clarification on ‘key’ aspects of the transaction as well as possible technology & execution ‘deal breakers’ resulting in a more accurate valuation of the targeted company
“We engaged SustainAsia to help us evaluate an investment opportunity in the environmental services space and we found their services invaluable: they were able toget our team up to speed on the landscape in
China, and subsequently, help us evaluate the investment during site visits offering real expertise. Throughout our due diligence process, SustainAsia was a great resource and gave us comfort on many issues.”