Our goal is to become a premier investment partnership. To achieve that goal, we need to consistently deliver superior risk adjusted returns to our investors in a sustainable way. We seek to make money responsibly. How do we achieve our goal?
We achieve our goal through sustainable investing. We create sustainability through focusing on 3 pillars. The first is human capital. The second is our disciplined focus on bottoms-up fundamental analysis. The third is our holistic achievement of all our stakeholders’ needs. By constantly striving to elevate the quality of our pillars, sustainability is created.
Why do we do what we do?
We started with a basic purpose of maximizing wealth, both for our investors and ourselves. However, as the journey continues, we find ourselves also connecting to a higher purpose – a higher purpose that resonates with our own personal values.
This higher purpose has to do with service. It is the realization that even in business, we need service to be the primary driver of our actions. Our higher purpose, therefore, is about using our significant investment platform to service the people, markets and economies in our targeted geographies. Our higher purpose, which becomes the ultimate purpose of Kendall Court, is to provide some element of development and betterment in the lives of the people whom our capital would have touched.
Our drive is best summarized in the vision statement of Kendall Court, as follows:
“To uplift the human conscience through business by becoming the premier investment partnership focused on achieving superior risk adjusted returns and investing its capital to develop people, markets and economies in accordance with the highest standards of ethical accountability.”
Kendall Court started in 2004. The 3 founding partners were the only employees of the firm. At the end of 2017, we have deployed, invested and managed over US$500 million across Southeast Asia. We started with assets under management of US$35 million. We have a presence in Indonesia, Singapore, Philippines and Malaysia. We have won several key industry and regional awards for our investments, operations and performance.
Kendall Court focuses its activities in the private equity space. We are a long-term investor and our capital is privately sourced. Our existing funds and managed accounts focus on investing in hybrid securities ranging from straight debt, convertible bonds, preference shares and straight equity. We are a growth capital provider, first and foremost. In line with our drive, our ultimate and primary purpose in investing is to contribute to the development and betterment of society, within our circle of influence. We care a lot about risk adjusted returns and recognize that the best investing structure is to attain equity returns with debt like risk. We will actively assist our investees but the fundamental premise is work alongside good solid management be it sponsors or employees and grow together.
We believe that capital, when employed wisely through business, plays an instrumental role (if not the most instrumental in certain cases) in developing people, markets and economies. A rising tide lifts all boats, and the tide is raised by capital. Our capital has to be sustainable, however. And that means that we will always still be engaged in the profit motive because Kendall Court and our investors need to be sustained through our profits. To sum up, we borrow a line from Paul Krugman, the 2008 Nobel laureate in Economics, who states, "You could say – and I would – that globalization, driven not by human goodness but by the profit motive, has done far more good for far more people than all the foreign aid and soft loans ever provided by well-intentioned governments and international agencies.”
To us, sustainable investing is achieved when we constantly strive to elevate the quality of the 3 primary pillars of our operations.
The first pillar is our human capital. Gary Becker, who won the 1992 Nobel prize in Economics and who is one of the world’s foremost experts on human capital, states that 75% of the value of a modern economy lies in its human capital. In our day to day activities, we cannot help but realize how true this precept is. Especially for an asset light and knowledge-based services company like Kendall Court, human capital is the most fundamental aspect of our platform.
The second pillar is our disciplined focus on bottoms-up fundamental analysis. We are not short term traders. As a long-term investor and a micro investor, our primary task is to understand our investees and their sector dynamics from the ground up. This is the only way for us to gain sufficient insight into the risks and opportunities offered by our long-term investments. Our success is directly proportional to the amount of effort we spent building on our knowledge and intuition. There are no shortcuts.
The third pillar is our holistic achievement of all our stakeholders’ needs. Our business cannot truly be called sustainable until we truly understand what each of our stakeholder needs. Our stakeholders start internally with ourselves (yes, our own individual needs), our investors and our employees, and subsequently radiate outwards touching on everyone our business comes into contact with. This obviously includes our investees, service providers, intermediaries and indirectly the stakeholders of our stakeholders.
When we begin to map our stakeholders’ needs, it becomes virtually impossible to ignore the environmental, social and governance (ESG) aspect of investing. For the reality of living in the 21st century, with its myriad of environmental, social and governance problems, requires that business be conducted in a way that stops the propagation of those problems. Our society demands it. Our stakeholders demand it. But most importantly, our personal ethics demand it.
We have witnessed first-hand the effectiveness of adopting a strong ESG mindset in business. Adopting the mindset is like switching on a light bulb. Once switched on, it immediately illuminates all the problem areas in a company’s operation. All companies have problems, big or small. Their causes vary. Having an ESG mindset is very effective in identifying problems which are created either out of lack of long-term care, convenience or a wasteful mentality due to false assumptions of abundance. When implemented genuinely, an ESG mindset is a very effective tool for:
• reducing waste and hence costs;
• spurring creativity, thinking in-the-round and out of the box, leading to potential new revenue sources;
• creating a more meaningful re-engagement with suppliers and customers based on their needs, thereby materializing potential P&L benefits;
• creating a more inspired workforce and a stronger human capital;
• recalibrating risk based on a proper and honest assessment of business risk mitigation; and
• increasing the value of the overall business from the implementation of all of the above.
Kendall Court has taken active steps to promote sustainable investing through active ESG promotion. We have streamlined all our operating protocols to include an ESG awareness; developed ESG toolkits to be used for screening and monitoring investments; trained the people in our organization, as well as our investees and service providers on acquiring an ESG mindset through workshops conducted by recognized regional ESG experts; trained our investment team in ESG risks and opportunities specific to the coal and gold mining, palm plantations and oil and gas sectors; trained our human capital in conscious business, that is conducting business by promoting the intelligent pursuit of happiness in all its stakeholders and expressing our essential values through our work – all in our efforts to reap the full benefits of sustainable investing.
In conclusion, we are firm believers that incorporating sound ESG principles across our investment platform is the only way to go. In more ways than one, we are a genuine capital partner to businesses who are willing to better its ESG framework. With just a little extra effort, it is in plain sight for all to see that ignoring ESG principles can be very detrimental to a business. Managers can be blindsided by unexpected business and brand failures such as tainted products, worker suicides or severe regulatory fines for environmentally damaging business practices. On the other hand, managers who have made genuine efforts to care and raise their ESG-conscious practices are much more equipped to mitigate risks and seize on new opportunities. Kendall Court works to assess, monitor and execute improvements to our own ESG footprint, as well as our investees’. A willingness to strive towards ESG improvements is a prerequisite for investees to receive our capital, and Kendall Court will come in as a value added partner to enhance this core aspect.
Our investors are mainly institutional investors and qualified individual investors across North America, Europe and Asia. Our institutional investors comprise of development finance institutions, global financial institutions, sovereign-backed funds, family offices and fund management groups.
We also work with co-investors in a majority of our deals. Our co-investors are primarily the limited partners of our funds and other global investment firms.
First and foremost, we are a provider of growth capital. Through growth, we intend our capital to achieve some measure of development and betterment of society in our target markets.
We invest using hybrid private instruments to invest directly into public or private companies. Our capital either (i) ranks junior to senior debt and ranks senior to common equity, or (ii) takes elements of debt (can be senior) and equity components in its issuance. We remain active in the businesses we invest into and ensure that our structuring takes into account the interests of both investors and investees - offering the most optimal risk-reward structure in what we invest into.
Our investment parameters are listed below. We invest in the middle market in Southeast Asia. We generally tend to stay away from auctioned deals where we have little pricing leverage. We employ a partnership based approach, so we will never do hostile deals. Our most important qualitative parameter is the creditworthiness and integrity of the management and controlling shareholders – we have a very low threshold and tolerance level for this principle.
We will be doubly enthusiastic with companies placing a premium on human capital development and quadruply repelled vice versa.
We look to assist our companies in raising their awareness on environment, social and governance matters, thereby increasing the valuation of our investments and mitigating our risks at the same time.
Prior to establishing Kendall Court in 2004, Chris was a Vice President at Citigroup Global Markets based in Singapore. At Citigroup, Chris had coverage responsibility for Southeast Asia, with a focus on Singapore, Malaysia and Financial Sponsors/Private Equity Funds. Prior to Citigroup, Chris was a member of the investment banking department at Goldman Sachs based in Singapore and participated extensively in all phases of the origination, management and execution of M&A transactions. Chris started his professional career working for Arthur Andersen in Malaysia in 1994 and was a Business Consultant. Chris holds a Bachelor of Commerce (Hons) and a Master of Accounting from the University of Western Australia. He also holds a Master of Business Administration from the MIT Sloan School of Management and a Master of Liberal Arts from Harvard University.
Andi started his finance career in 1995 at the investment banking division of Bank Internasional Indonesia, a local private bank. Subsequently he became a Vice President at Holdiko Perkasa, a holding company set up by the Indonesian Bank Restructuring Agency to divest assets surrendered by the Salim Group due to obligations stemming from the 1998 Indonesian financial crisis. Post Holdiko, Andi co-set up Penta Capital Partners to provide financial advisory work for Indonesian corporates. Andi graduated from Diponegoro University in Indonesia with a Bachelor in Management and has an MBA from the University of Illinois at Urbana-Champaign.
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The Australian company that lost control of its 80 percent stake in Indonesia’s Tujuh Bukit copper-gold deposit in 2012, will receive $80 million to settle the dispute. A deed of settlement, subject to shareholder approval, will end all legal action in relation to the project and result in Intrepid selling its interests to Kendall Court Resource Investments Ltd., the Spring Hill, Queensland-based company said today in a statement.