Thomas Hugger: Only Frontier Markets Offer Uncorrelated Returns From A Troubled Global Economy

Summary: http://www.ChinaMoneyNetwork.com<br> In this episode of China Money Network, guest Thomas Hugger, CFO of Leopard Capital, a private equity firm focused on investing in Asian frontier markets, discusses the successes and failures of his firm's investments in Cambodia, the impact on frontier markets from a slowing Chinese economy, and why frontier markets offer better risk-return profiles than emerging markets.<br> <br> Listen to the full interview in the audio podcast, watch the shortened video version or read an excerpt.<br> <br> INTERVIEW EXCERPT<br> <br> Q: First give us a brief introduction of Leopard Capital?<br> <br> A: Leopard Capital was founded in 2008. Our general goal is to make private equity investments in frontier markets. We've raised two funds so far. In March 2008, we raised our first private equity fund to invest in Cambodia. Another fund was raised to invest in Haiti. We are hoping to launch two additional funds to invest in Bangladesh and Bhutan this year.<br> Q: How much capital do you have in these funds?<br> <br> A: The Cambodia fund has $34 million. The Haiti fund has $20 million. For Leopard Asia Frontier Fund, we start with money from family and friends, and we are going on road shows to raise more money. At the moment, we are at $2 million.<br> <br> Q: There is certainly lots of interest in frontier markets now. When you talk to potential investors, what's the biggest concern that they have?<br> <br> A: Their biggest concern is liquidity and execution of investments. Their question is: Are these countries ready for private equity investments?<br> <br> We try to tell them that it's possible to make private equity investments in these markets. For our Cambodia fund, we are in our fourth year. We are fully invested and had two exits. So we are convinced that it's possible.<br> Q: Can you share one or two investments you made that didn't turn out as expected, and the lessons you learned from them?<br> <br> A: We invested in a shrimp processing company in Cambodia. Our partners were foreigners, not local Cambodians. We came in when the factory was just started. We expected it to be a passive investment and we had one seat on the board. Unfortunately, we became much more involved. The company didn't make money according to the business plan.<br> <br> The problem was not that we didn't have enough clients. We had a lot of interest from international purchasing of processed shrimp. The problem was on the supply side. In Cambodia, there are no shrimp farms. The company's specialty was wild-caught shrimp. We knew the catches of shrimp in the sea are volatile. We had estimates, but we weren't able to secure enough supply of wild shrimp. We put more capital into the factory, but had to close down the production in the end.......for complete post, please go to http://www.chinamoneynetwork.com<br> <br> Thomas Hugger is CFO of Leopard Capital, a private equity firm focused on investing in frontier markets, particularly Asian frontier markets including Cambodia, Bangladesh, Laos, Vietnam, and others. Hugger spent 27 years in private banking, most recently as managing director at LGT Bank in Hong Kong. Earlier, he worked at LGT Bank in Zurich and Bank Julius Baer in Zurich and Hong Kong.