Equity Investment

In our work, we sometimes come across businesses with which it makes sense for us to partner for the long term. We therefore seek to conclude equity investments with selected businesses that meet our investment appetite and where we can add long term value in terms of their growth and value maximization.

How We Invest

We back committed and experienced management teams – CAPITAL will only invest in businesses run by management teams with proven record of achieving business goals. We strongly believe in investing with committed and experienced managers and/or owners with significant stake in the success of the business.

Invest in small and medium sized companies (SMEs) with a history of profitable operations (not startup / projects) – We invest in established businesses that have demonstrated or can demonstrate what it takes to be profitable over a medium to long term horizon.

Take significant minority stakes (10-30%) in the companies we invest in – Our preference is for substantial while not necessarily controlling interests in our investment companies where the established shareholders and management team retain a significant equity interest in the business, maintaining the focus on collective shareholder value.

How We Add Value

As private equity investors, we take an active approach in working with the management of our investee companies to “grow the pie” by expanding its business, increasing market share and profits by introducing new capital, entering new markets and improving operational efficiency.

We seek to add value to a company in the following ways:

Assist with market access – Work with management to open new markets first in its domestic market and subsequently across the region. Our presence in Southeast Asia affords us insights into opportunities across the region that we seek to exploit for the benefit of our investee companies.

Helping develop key business relationships – that may include assisting our investee companies to obtain better terms from their key suppliers or helping source new suppliers that may provide better terms by leveraging synergies between the companies in our investment portfolio.

Attracting and developing management talent – we recognize that one of the biggest challenges that growing mid sized companies face is attracting key talent necessary to sustain their growth. Our presence as investors in a company significantly enhances a company’s profile and makes it a more attractive place for talent to come to work.

Helping to gain access to credit and capital – capital is the engine of a growing business and we leverage our experience and network in the debt and equity markets (local and international) to enable our investee companies access additional capital for their growth.

Submit Your Investment Proposal

If our value add proposition makes sense to you, you are welcome to submit your investment proposal / business plan to team@capital.com.my for review. We will endeavour to revert to you with our response within 5 business days.

Note: It is our policy not to sign Non-Disclosure Agreements and if necessary, this will only be considered at the detailed due diligence stage. In the initial stages, it is not necessary for us to know your trade secrets in order to assess your project’s viability.

The First Meeting

If, on reading the investment proposal / business plan, we do not think we are interested, we will tell you right away; we will also try to explain why. This might be because we do not have enough investors keen on the sector, or in your area, or we think that you are being unrealistic in your valuation of your business. In this case we will either return the plan to you at your request, or securely destroy it.

If we think we might be able to help, the firm’s management will then select whichever of our colleagues is best placed to meet you. This first meeting is an important one for us both, since from this we will decide what to do next. You need therefore to prepare for this meeting, held at a mutually acceptable venue. We will quiz you on the investment proposal and will seek answers to the key aspects of the proposal that our investors are looking for, i.e.

Can the management team demonstrate that it has the ability to turn investment into profit? Is there anything in their track record that supports this?

What is the “discriminator” in your business? What makes your company different from its competitors and therefore more likely to succeed? Perhaps patent protections, proprietary information or other factors that will give comfort to investors that you are “special”.

What is the potential exit route, when and where is it? Remember investors are not looking for lifestyle businesses; they want to see growth, perhaps followed by a trade sale, float, sale back to the management or whatever.

How much is really needed, when and why? Can funding be phased? What is the new money to be spent on – investors will not put money into a company merely to repay shareholder/bank debt, or to fund a lifestyle.

What is the deal? How much equity are you prepared to sell? How did you arrive at the figure? Is there a skills gap in the team that a suitable investor can help fill?

Are there any time or other constraints (apart from “as soon as possible” – everyone seems to come to us too late!) or other factors that we need to be aware of?

team@capital.com.my

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