PIONEERING TRANSFORMATIONAL PRIVATE EQUITY

In our early days, especially from 2001 to 2007, we tried to add value by sharing our valuable ideas, providing solutions, and sometimes doing work for the investee companies. Hence, we applied value-addition programs to implement operational performance enhancement projects (such as six sigma or lean manufacturing systems), financial management, human resources recruiting, and corporate governance advisory.

We were going to Board meetings and giving valuable suggestions. We even hired Six Sigma and Lean Manufacturing experts to show the companies how to improve their operations, but it just wasn’t working. No matter how great our ideas were, they had little or no impact.

In December 2007, we embarked on a journey from which there would be no turning back. We blew up and reinvented everything about Mekong Capital, including who we are, our culture, how we add value, how we see the world. What emerged was a new model of Private Equity, transformational in nature, grounded in who people are and how things occur to them, rather than the traditional knowledge-and-solutions approach of most private equity firms. We call it Transformational Private Equity.

We believe that most of what occurs as reality is contextual and is constructed in language, communication, and artistic expression. In other words, context is decisive. We can be at the source of the contexts, or ways of seeing things, that we create around anything on which we put our attention.

“ In a Private Equity context, our partnership with each investee company starts with our shared vision for the future of that company, not an aspirational vision but a committed vision.”

Therefore, standing in our shared commitment to each of our investee achieving their visions, we have designed our involvement in such a way that our investee companies take actions to create for themselves ways of looking at things that lead to breakthroughs in performance necessary for their vision to be achieved.

We utilize a framework called Vision Driven Investing, which was originally launched in 2009. The Vision Driven Investing framework is regularly reviewed and refined, at least quarterly but typically more frequently based on careful analysis and insights about what’s working best. The framework is carefully back-tested against our past 42 investments since 2001 to ensure it is strongly correlated with what has led to the best performance among our investments until now.

Vision Driven Investing is an transformational framework, meaning it is the domain of occurring and being, not knowledge. We assert that when people create new ways of occurring and new ways of being, new actions will naturally arise, and new breakthrough results will be delivered. The 15 elements of Vision Driven Investing could be thought of as 15 perspectives, like places to look from and ask questions from.

These 15 worlds can provide a vivid and complete view of what it takes for a company to achieve its Vision reliably and provides access to the necessary transformation. Vision Driven Investing is NOT a set of best practices or solutions. It is not something that we can give or force onto a company. Instead, it is a space in which our investee companies discover and create for themselves, always towards fulfilling their Visions.

From our founding in 2001 until the middle of 2008, Mekong had not made any exits. Some of our investors doubted our ability to exit. In fact, some investors were quite upset that we missed the opportunity to exit some investments in our first fund in 2007 when the market was in a bubble. So, the pressure was really on.

Finally, in December 2008, Mekong Enterprise Fund sold its stake in an LPG distribution company, Saigon Gas, to the French oil and gas giant, Total Group, who acquired 100% of the company at valuations that were appropriate for a trade sale to a strategic buyer. This was Mekong Capital’s first divestment, but it opened the floodgates.

Since then, Mekong has completed 28 full exits, through a full range of exit routes: trade sales to strategic investors, sale to other PE funds, listing on the stock market, and selling to other public equity funds, or in some cases, sales back to the founders.

For a complete list of our exit investments, please visit here.