In the News: 2004

Bangkok Selects Lombard And MFC To Manage Thai Equity Fund
     
Asian Venture Capital Journal
5 January 2004
 

A major international effort, backed by official Thai financial institutions, to increase private investment in the country’s bourses is gathering steam.  The Thai government has appointed Lombard Thailand and MFC Asset Management as the administrators of the Thailand Equity Fund.

The 10 billion baht Thai Equity Fund was launched in 2001, with investment from CalPERS, the International Finance Corporation, Asian Development Bank, 13 Thai commercial banks, the Industrial Finance Corp of Thailand, Thai Government Pension Fund and Thai Government Savings Bank.

The fund’s investment yield in 2003 was a commendable 60%.  Referring to the performance, Wasin Wattanaworakijkul, Director of Business Development at MFC, commented that the fund’s rate of return was “considerably high” because of  the sustained and broad-based expansion in the country’s economy, which in turn has boosted Bangkok’s equity market.

In the past year, the fund has invested 3 billion baht in five companies with high growth potential, Wasin revealed, adding that the policy of pouring money into selected target firms will continue in 2004 also.  “It’s a 10-year fund, so we don’t have to rush to invest all at once.”  The investment in the first few years would be gradual and the managers will watch the returns.  Among the well known investee companies of the fund are Trinity Securities, Central Pattana and Thailand Internet.

According to fund managers MFC and Lombard, who are currently assessing potential portfolio companies, the prime targets are likely to be firms in the construction, consumer products and export industries.  In recent weeks the managers have been consulting the Thailand Asset Management Corp (TAMC) on the state of potential targets, Wasin stated.  One of the fund’s founding objectives was to boost the role of TAMC in debt restructuring schemes.  TAMC was established by the government after the 1997-98 financial meltdown.

As part of its regular investment process, the fund last month invested in Ticon Industrial Connection, an industrial real estate developer.  Ticon issued 50 million new preferred shares to the fund at 9.25 baht apiece.  The company’s board of directors have allowed the shares to be converted to ordinary voting shares as and when the fund’s managers decide to do so.  Among the major shareholders of Ticon are ABN Amro Asia, Wai Cheng Kuan and Rojana Industrial Park.