Asian Venture Capital Journal | Author: Andrew Woodman
Since arriving in Hong Kong in 1986, AIF Capital’s Peter Amour has witnessed the emergence of China and the ups and downs of Southeast Asia, enjoying some of the opportunities that have come with it
“It was a fascinating place,” says Peter Amour, CEO of AIF Capital, recalling Hong Kong in the mid 1980s. “Anyone involved could see firsthand the impact of China opening to the migration of manufacturing across the border, the opening up of trade flows and the emergence of the tigers in Southeast Asia.”
Amour had the privilege of witnessing this evolution from a number of different vantage points: as a lawyer, as a corporate advisor with an investment bank, as vice-president of one of Asia’s largest animal feed producers, and finally as a private equity investor.
The road to his first job in finance, with Standard Chartered Bank, began in 1979 when he was still a student at the University of New South Wales taking a dual degree in accounting, finance and law. “It was very early on so there were very few commercial trips to China,” recalls Amour. “I did a big tour and I saw even then there were going to be a lot of changes and I wanted to be a part of it.”
The trip had made enough of an impression that in 1984, after two-and-a-half years practicing law in Sydney, Amour returned to China to take up a scholarship at Shanghai’s Fudan University. From there he joined Baker & Mackenzie, first in Shanghai and then in Hong Kong. He didn’t turn back.
One Amour’s first clients was Standard Chartered Asia, and after advising the bank on a number of deals he joined full time in 1987. While there he became involved with Thai agri-business Charoen Pokphand Group (CP Group), one of Asia’s largest animal feed and chicken producers, and the first company to go public in Hong Kong with a large part of its business in China.
Following the listing, CP went on the acquisition trail and was looking to raise more capital. Through his work with Standard Chartered Amour got to know the company well and in 1990 he was offered a position as vice president with the firm’s finance group in Hong Kong.
“I jumped at the chance,” he says. “It was a great opportunity and even back then they were a major investor in China and had a very large set of business activities spread over the agriculture and industrial sectors.”
Amour stayed in role for nine years and took part in more than 150 transactions in sectors as diverse as food and beverages, agriculture, telecom, power, industrial manufacturing and logistics. He also handled the major debt and equity financing requirements of the firm’s Hong Kong-listed entities.
“Even then it was still very much the early days of China opening up so the challenge was getting a grip on the dynamics of the local market and the potential that was out there,” says Amour. “It was a less sophisticated environment than today, so it was all about educating the market and financiers of the opportunity that was there.”
During this period, he participated in another IPO first when CP Group listed subsidiary Ek Chor China Motorcycle on the New York Stock Exchange in 1993. It was the first non state-owned enterprise affiliate with all its business in China to debut on the US bourse.
Amour then left CP Group in 1997 to start his own business and co-founded Axia Capital Partners, a boutique investment advisory. His first client was AIF. “The Asian financial crisis had occurred and AIF – because it was a regional fund and had assets in the Philippines, Indonesia and elsewhere – had some challenges in the first fund portfolio,” says Amour.
Among Axia’s other mandates was the $100 million Hong Kong-listed Shanghai International Shanghai Growth Fund, which was sponsored by Temasek Holdings, the Shanghai municipal government and Taiwan’s Kwang Hua Securities. The firm also advised a large US corporate pension fund on a $100m private equity investment fund targeting Hong Kong, China and Thailand.
Amour was eventually invited to join AIF as COO in 2002, becoming CEO a year later. The firm had been focused on infrastructure was been working through its first fund, Russell AIF Asia, which closed in 1994. The successor fund, which closed at $100 million in 2001, saw a shift in strategy.
“What became clear was that opportunities for us then were not so much doing large infrastructure projects but focusing on more growth capital opportunities in Asia,” explains Amour. “In the early 1990s in emerging Asia there was a need for infrastructure investment but once that had been laid by the early 2000s we saw the emergence of mid-cap companies looking to take the advantage of this infrastructure and they needed capital.”
Expansion and integration
Fund II identified three major investment themes: the emergence of the middle class, the growth of manufacturing across Asia, and regional integration through cross-border expansion. More than 10 years and two funds later – AIF reached a final close of $315 million on AIF Capital Asia IV last November – the change of strategy seems to have paid off.
Notable investments have included: Singapore global agri-products supply chain manager Olan International in which AIF was the first PE firm to invest before it went public in 2005; YES Bank, one of the most successful Indian banks of the last decade in which AIF invested $3.2 million for a 7.5% stake in 2003; and Bharti Infratel, the Indian telecoms infrastructure subsidiary of Bharti Airtel, which received early backing from AIF before it raised around INR4.17 billion ($763 million) last December in what was India’s biggest IPO in two years.
“We have been doing this across Asia for the last 20 years so the network of portfolio companies we have worked with is very strong,” say Amour. “The last decade has seen the range of businesses out there and sophistication of the management teams improve and we are very excited about the next decade because growth and Asian integration will only continue.”