The ShawKwei Dynamic
ShawKwei & Partners is a private equity fund manager with offices in Hong Kong and Singapore.
We invest in middle-market manufacturing and service companies operating across Asia.
We have been in Asia for over 25 years. Our deep knowledge and experience enables us to understand the unique challenges faced by Asian companies competing in today’s global markets.
We take significant ownership stakes in our investments coupled with a disciplined and hands-on management of those investments.
Our investment philosophy is to assist portfolio companies to build better businesses and achieve long-term success.
The ShawKwei strategy, methods and practices are specially crafted for private equity investments in businesses operating in Asia. Together they form the partnership between ShawKwei and our portfolio companies.
ShawKwei manages our private equity investments to increase business value by including the following best practices in a partnership with management and key stakeholders:
Strategic Planning & Execution
- Join the board of directors as well as audit and compensation committees.
- Identify and realize sustainable performance improvements in areas such as sales growth, profit margin expansion, and asset/capital efficiency.
- Implement international best practices in business practices and corporate governance.
Financial Planning & Execution
- Rigorous analysis of recent financial results and operating budgets.
- Establish world class accounting systems and cash flow measurements for management decisions and for annual audit.
- Raise new debt and/or equity for healthy growth.
- Recruit managers critical to future development and complementary to the current team.
- Invest in new factories and equipment, as well as divest under-performing assets.
- Research and execute M&A deals to complement organic growth.
Primary Investment Sectors
Types of Investment
Strategic growth capital
Investments in facilities, products, or new locations to grow sales.
Creating the right-size capital structure, sometimes by reducing debt and other times restructuring with new debt.
Negotiated placements with publicly listed companies
Friendly negotiated share purchase to support strategic initiatives.
Buy-outs of subsidiaries from multinational corporations
Acquiring businesses from multinational corporations identified as non-strategic and scheduled for divestment, and then supporting the business as a stand-alone company.
De-listing of publicly traded companies (public to private deals)
Privatizing publicly listed companies to pursue long term strategic plans by providing more flexibility to manage the business development, reduce compliance costs , and optimize the use of its management and capital resources.
Buy companies from founders seeking an experienced investor to takeover the ownership and shepherd company to next generation of professional management.
Investment Track Record
Selected Partnership Profiles
Partnership Duration: 1990 – 2000
Investment Type: Leveraged Buyout
Situational Overview: Flextronics needed to raise cash to retire debt associated with USA over expansion. We acquired 56% majority stake, for US$32 million, in the Flextronics Asian EMS factories and design centre from its parent, Flextronics Inc.
Partnership Strategy: Working with the management team restructured the Asian operations through reducing high cost geography footprints and expanding into China and Malaysia. Separated core business from heavily levered parent. Enhanced revenues by capturing growth from OEM’s outsourcing, and profitability from right-sizing operations.
Result: IPO on NASDAQ in 1994. Assisted Flextronics to grow rapidly around the world, growing revenues from US$103 million in 1994 to $26 billion in 2015, and a US$125 million market cap in 1994 to $61 billion in 2015. Kyle Shaw, SL Tsui, and Randy Kwei were all directors at time of buyout.
"It all looks obvious now, but back in 1990 the whole notion of outsourcing complex, hi-tech manufacturing functions to China was revolutionary. At the time, there were plenty of naysayers.."
Partnership Duration: 1994 - 2001
Investment Type: Cornerstone IPO Investor
Situational Overview: Fang Da is a China-based business that designs, manufactures and installs glass, steel frame, and aluminium frame curtain walls for high-rise buildings. Fang Da was seeking expansion capital to increase capacity to meet customer demand. Kyle Shaw led an investment for a 20% stake in an IPO on the Shenzhen stock exchange.
Partnership Strategy: We introduced corporate governance consistent with international best practices, increased production capacity by 67%, streamlined the balance sheet and established a new business development plan focused on key strategic projects. Kyle Shaw joined the board of directors in1995-2001, as one of the first Western Directors in China
Result: Revenues grew from RMB$64 million in 1995 to $307 million in 1996. IPO in 1995 on Shenzhen stock exchange. Today Fang Da generates over RMB1.9 billion in revenue and is now one of the leading infrastructure players in China.
"Fang Da's curtain wall technology was new in China. We saw that the building materials industry was set to benefit from the boom in construction."
Partnership Duration: 2009 – 2011
Investment Type: IPO Public Market Investment
Situational Overview: Schramm is a specialty coatings formulator with operations in Europe and Asia, and were the first German company listed in Hong Kong in 2009. ShawKwei was initially approached to be an anchor investor in Schramm’s IPO, but declined due to a high valuation, but then purchased a few months later in the market to become the 2nd largest shareholder.
Partnership Strategy: ShawKwei assisted management to expand and grow sales in China, improve capacity utilization through economies of scale, and worked with the management team and board of directors.
Result: After becoming the 2nd largest shareholder and assisting in key China growth initiatives, Schramm was acquired in a US $200 million buyout by Dutch specialty chemical producer AkzoNobel. The deal enabled AkzoNobel to strengthen its global leadership position in specialty plastic coatings.
AkzoNobel paid a 163% premium over closing price.
"We took our Asia expertise and capitalized on the global recovery conditions, normalizing from a difficult period in early 2009 in the automative sector."
• AMOS Acquires Hong Kong-based World Hand Shipping
• ShawKwei Investment creates Marine Solutions Centre for AMOS
• ShawKwei merges portfolio companies Beyonics and Chosen - Creates Asian Leader in Precision Engineering
• Asian Venture Capital Journal: ShawKwei's portfolio turn around - Beyonics
• New Strait Times article “New Beginning for Beyonics” [a ShawKwei & Partners portfolio company]
• Offer Document on the Voluntary Conditional Cash Offer to acquire Chosen Holdings Limited
• Shaw Kwei & Partners announced a Voluntary Conditional Cash Offer with a View to Delist Chosen Holdings Limited
• Business Times Singapore interview of Kyle Shaw, Managing Director of Shaw Kwei & Partners
• Beyonics invests US$10 Million in a new manufacturing facility in Johor, Malaysia
• TheEdge Singapore interview of Kyle Shaw, Managing Director of Shaw Kwei & Partners
• Shaw Kwei & Partners invests and delists CHT from the SGX in a US$66 Million acquisition
• Shaw Kwei & Partners invests and delists Beyonics from the SGX in a US$115 Million acquisition
ShawKwei & Partners
16/F Euro Trade Centre
13 Connaught Road
Central, Hong Kong
T: +852 3162 8479
ShawKwei & Partners
30 Marsiling Industrial
Estate Road 8, Singapore
T: +65 6349 0843