Our investment strategy results from our "lives" as active investors in private equity funds around the world but with a
particular emphasis on emerging Asia.
Private equity in emerging Asia changed dramatically
in 2008 with the eruption of the global financial crisis. The days where fund managers benefitted from beta disappeared.
It is all about alpha which we can control or at least influence.
Thus, we decied our approach needs to be centered
around consumer-driven companies managed by strong teams with highly scalable business models, efficient capital
structures, potential for brand recognition
and category leaders which address large markets and benefit from powerful
long-term growth trends.
We believe that we can only add a lot of value
if we work with the entrepreneurs as partners and specialists to substantially help
grow their businesses. We feel that the specialist approach is paramount to be
a mile deep and not a mile wide in order to gain the respect of the founder and/or
Therefore, the key building blocks besides finance,
ERP and corporate governance include:
Promotion is related to brand management. Many
entrepreneurs in emerging Asia focus on topline growth and often neglect to significantly
enhance their brand. However, a strong brand usually leads to high barriers
to entry, price premium and stronger negotiation
power vis-a-vis suppliers. Branding, brand managment and brand architecture represent
an important pillar in our strategy. Product development is another key facet of
our hands-on approach.
The second area is human resources. The main challenge
of these emerging companies is execution. Thus, we greatly emphasize on human resources to strengthen management, introduce/monitor performance metrics, talent identification,
The third area is strategy and business development
leveraging our expertise and the domestic networks in China, India and South
East Asia as well as our international contacts to specialists around the globe.
Our hands-on approach helps us make these companies
appealing to strategic and financial buyers, our main exit routes.
Capvent mainly focuses on:
- Personal Spending
- Food and Beverage
- Personal Care
- Water/Sustainable framework
We believe that portfolio construction is important
for a private equity group addressing the needs of investors in this asset class.
As a result of our experience as an investor in many PE funds globally and as a
fund manager over the last ten years, our portfolio consists of companies that fall either in the "early growth" or "late growth" bucket.