Spotting Trends And Riding Them

SINGAPORE

Very early in her career, Shirley Crystal Chua had ambitions to strike out on her own. “People around me had been telling me that I had the personality and resilience to be an entrepreneur,” the founding partner and chief executive of asset management and private equity firm Golden Equator Capital Pte. Ltd (GEC) said, asked about her decision to leave Citibank (Singapore) in 2012, after an eight-year stint with the bank.

Leaving Citi, where she was a director handling high net-worth clients from Asia and Europe, as well as mentoring new bankers and supervising a team of experienced relationship managers, was the best career decision she made, Chua says.

GEC, with a 50-strong team, now has $250 million in assets under management, along with a private equity and venture capital arm, as well as a robust consulting practice.

Even so, she continues to practice the lessons she learned from her stint at Citi.

“The biggest learning (from Citi) was related to managing people. The knowledge that I picked up, when it comes to financial space, was substantial to ensure that I could set up something on my own,” Chua said.

“Other learnings included organizing a business, which I always feel is very underrated and being able to juggle multiple things simultaneously,” she said.

Yet Chua also says that corporate life, and that of an entrepreneur, are very different.

Being an entrepreneur demands a lot more–one needs to raise funds, possess administrative skills, communicate very well, have strong domain knowledge, and be a visionary.

“As an entrepreneur, in addition to running your company, you need to have the eye to spot all the important trends and lead the business in that direction,” she added.

Chua also says that not every entrepreneur can possess the entire gamut of skills required to run a company; hiring talented people is the only way to fill the gaps.

“I would consider Grace Chiong, GEC’s chief operating officer, as my co-founder. She was my mentee at Citi on the management associate programme. She compliments my skillsets–as an entrepreneur, if you are a visionary, you also need someone who is administratively very strong to support your vision,” she said.

Chua says GEC so far has managed to spot the trends and ride them. From starting off as a family office, the firm moved on becoming a multi-family office, launching a consulting arm, and raising tech and realty funds.

Usually multi-family offices are used by clients whose wealth is around $20 million to $50 million. These numbers do not make it economical to have a single family office.

Multi-family offices provide their clients services like tax and estate planning, risk management, financial counseling, trusteeship, investment advice and foundation management, among others.

Chua said GEC has an approach that’s different from those of traditional multi-family offices, and attributed this to the changing needs and aspirations of the new generation of Asian families.

“Our services are very specific to the needs of the new generation–at the same time, it is also very specific to how the past generation is going to pass on their wealth to the second and third generations. For example, if you are a property tycoon or a businessman in this region, and if you have children in the 30s, who want to strike out on their own, the families usually support them, and help them prove themselves. We help the next generation develop the business, get the right people on board. This is why our consulting arm is so important. We even invest via our funds into some of these companies, to help these firms grow. From a multi-family office, we expanded into the fund management business–there is a connection there,” she added.

GEC’s first major diversification came when some of the families whose wealth it managed sought to make investments in tech start-ups and realty projects. It raised a $40 million technology and innovation fund, and has put together a $60 million to $80 million Development Fund to invest in realty projects. “For the development fund, we have a unique structure. This fund is still open, as we are evaluating some projects outside Singapore,” she said.

Chua said GEC plans to launch a follow-on technology and innovation fund and raise $80 million to $100 million.

“We have a good track record to show, as we raise Technology and Innovation Fund — II. We are also working on having a second realty fund. We will eventually look at having a buyout fund also,” she added.

Against the traditional VC tenures of 8+1+1, or 10+1+1 cycles, GEC opted for a much shorter span of 4+1+1 years for its first tech fund, and plans to extend this to 5+1+1 for its follow-on technology and innovation vehicle.

“It is going to be a speed to market game; those companies that take 10-15 years to grow will lose out to those companies that take 5-7 years to grow. We understand how to do M&As (mergers and acquisitions), and it is not difficult for us to bring companies into synergies and exit. That is why the entire value chain–from investing into companies to helping them grow is very important…A lot of funds will give you verbal advice, but we really get our hands dirty and help them,” she added.
GEC also has a Primary Currency Fund that has assets of around S$15 million.

While acknowledging that market conditions are not ideal, Chua remains confident the firm will be able to launch and raise new funds in the immediate future.

“It will be challenging to raise funds this year, but there is still a lot of liquidity out there, and there will be people with a lot of cash looking to invest. We have advised our clients in the last few years, which puts us in a good position, especially now,” she said.

Chua said the firm was also looking to cater to the increasing appetite being shown by investors in the West to tap the Asia opportunity. “A lot of Europeans want to invest in Asia, but do not know how to do it, and who to go to,” she explained.

Golden Equator currently has a full capital markets services (CMS) licence, and the firm is also evaluating the option of getting a corporate finance licence. “We’ve talked about this as some of our portfolio companies will want to list in the future–who else but us to support them, as we helped them reach that status. This is something that we know will make sense for the future,” she said.

GEC is also setting up a co-working space to get some of its portfolio companies under one roof. Chua says that this will help these start-ups drive synergies, become stronger and more efficient, and also allow them to become regional players.

Despite the funding slowdown, Chua said GEC has not asked start-ups in its portfolio to cut down expenditure dramatically.

“These are new companies, and these have to be very lean in the first place. We expect our portfolio companies to be very tight. Where they should be spending money is to get themselves to be known in the right market — they have to be strategic, so that when the time is right and ready, they can expand quickly, or be acquired,” she added.

Chua says her greatest challenge is to say no, but adds that she “always said no to collaborations that did not make sense.”
The Golden Equator CEO says Singapore provides the “right environment” for women to take on leadership roles, but the numbers don’t reflect this.

“We need to be seeing more women leaders in corporates, in Parliament, as directors in companies…this is true for not just Singapore, but across Asia. In Singapore, the barriers are really low — women have an equal chance, but we need to work towards creating the suitable environment for women leaders. Internally, companies need to create the opportunities,” she said.

On juggling work and taking care of her seven-month old son, Chua said she has a “collaborative husband,” a supportive mother-in-law, and a great nanny.

“Many women don’t have this advantage — this may not appear like a big issue, but it is important for women to be successful,” she added.

Prior to joining Citi, Shirley began her career at American Express International, where she led a team in the area of marketing and channel distribution. She graduated from National University of Singapore with a Bachelor of Arts and Social Sciences, majoring in Economics and Southeast Asian Studies.

Edited excerpts from an interview:

Question: How do you see the entrepreneurship scene in Singapore?

A: Some countries create an environment where entrepreneurs cannot really fail. I think Singapore has the base infrastructure that promotes entrepreneurship — we have the legal structure, there is financial support in terms of the ability to get funding and we have a good talent pool. These are the positives. But there are some factors that are not pro-entrepreneurship. In India, China and Indonesia, some of the entrepreneurs that come out have no room for failure and that makes them so resilient — but in Singapore, a lot of entrepreneurs have the comfort that if you fail you can get another job — there is always a second, third and fourth option. We have a lot of grants to support the entrepreneurship environment and this is a two-edged sword — this can either be considered pro-entrepreneurship, or we can argue that is is not promoting the right spirit. Singapore also needs to reinvent itself.

Question: What do you mean when you say Singapore needs to reinvent itself?

A: We need to know our core strength, which is our strong legal system, and also that we are a financial hub that people can trust in terms of where they can put their money. It is a jurisdiction that people feel safe (in). Each time there is a crisis in the region, we benefit from it. We need to know how to benefit the most. We also have a system where the rules of conducting business is very clear. The ways of finding funding here is also very abundant. What we need to do is develop soft assets — we need to promote the middle portion of funding. Silicon Valley companies are very strong, because the ecosystem there is strong. The ecosystem is not just great companies, but also a culture that is progressive and promotes entrepreneurship. Everyone in the entire ecosystem — lawyers, corporates, VCs, all talk to each other, and this promotes efficiency, and it elevates the entire industry. When I said that the middle layer needs to be strengthened, what I mean is that, we may be very strong as a jurisdiction, but investors won’t be able to understand why a company is commanding a certain valuation — at every layer you need to have investors who are interested, and understand what the companies are doing, and why they are at that valuation.

Question: A big step towards giving investors an exit is listing — but Singapore has hardly seen any listings over the last 18 months.

A: Yes, and this is part of lifting up the entire ecosystem. We face a great risk to Singapore being the leading financial hub if we don’t reinvent ourselves. We have to reinvent to ensure that we don’t lose out on the opportunities that are being captured by Australia, Hong Kong, may be London. We are not a fintech hub because we are too fragmented — everyone is doing their own thing. Everybody has their own interests. There needs to be stronger integration. It needs to be synergized, and the community has to be tighter to evaluate the entire ecosystem. This is where we may be lacking.

Question: What are the investment trends that you are bullish on this year?

A: Ok, bright spots to invest are there in both listed and non-listed firms. For non-listed, I am very pro-tech across Asia. As long as it is a great company, with a certain proposition…It must have good leadership, execution has to be there. As Asia ages, healthcare will be an area in the listed space that will be a bright spot. This year, it will be all about choosing the right companies, with high yield, with great dividends. .