Actcelerate International Group is a Diversified Investment Company whose focus is on the Asia-Pacific market. Our investments focus on four major sectors. These are, Information and Communications Technology, New Age Retail, Financial Services, and Green Technology. The objective of the company is to capture the above-mentioned sectors, that have a high potential for growth, in the Asia-Pacific market. This is as the Asia-Pacific is a single market and production base, and is a competitive economic region within the global economy.
We invest in companies and businesses which meet the above-mentioned criteria. We then provide these companies with the opportunity to expand their market coverage. We focus on SMEs and start-up companies in the Asia Pacific that have the potential for continuous growth. We can strengthen our purchasing power by leveraging and co-investment collaborations.
Our target companies will be working closely with us in all aspects of business. This gives them an in-depth, better understanding of the nature of the business. It allows us to develop focused strategies to accelerate the growth potential of the business.
To be a leading investment company in Asia Pacific that is committed in nurturing emerging companies for future expansion.
To establish sustainable investments by propelling highly innovative technology focused emerging companies to the international scene by consolidating financial knowledge. We places high emphasis on integrity and transparency in execution and maximising shareholders’ wealth.
Risk / Reward Profile
As with almost any industry, business risks will always be a factor. Increased competition, changes in the economic environment, political issues and other unforeseen circumstances may become a hurdle to the industry’s sustainability.
However, there comes reward with risk. With our experienced and most trusted advisors, we can mitigate, improve and add valuable resources that create unimaginable value to the company, in turn bringing rewards to our stakeholders and shareholders.
Investing in the Asia-Pacific Region
Research in market segmentation has identified the Asia-Pacific as one of the most preferred regions for excellent future growth prospects. Over the past few years, the government debt of Western nations have increased dramatically. In comparison to Europe, the United States and other G20 nations, Asia’s policy makers will possess more flexibility when it comes to managing growth.
In the decade since its own financial crisis, Asia has undergone a radical transformation. The crisis forced countries to confront structural weaknesses, implement market reforms and promote the private sector. Prudent economic management has delivered strong growth and stable currencies. The result today is a region that has re-discovered its dynamism. In areas such as manufacturing, technology and outsourcing, many Asian companies are leading the way. An empirical test has also showed in Figure 1 the historical GDP growth performance of Asian countries (excluding Japan), have been outperforming the developed economies.
Asia’s share of the global GDP is on the rise, and the shares of a group of developing Asian countries is already ahead of both the U.S and Europe. The current trend of world GDP is shifting eastwards, and will continue for the medium to long term, as can be seen in the proportions of world GDP by region Figure 2. Emerging market and developing economies are forecasted to represent approximately 69% of the world GDP by 2050, with developing Asia specifically forecasted to represent 49%. Asia’s growth projections give a compelling picture of the region’s long-term viability in both equity and fixed income markets.
Investing in the Asia-Pacific Region
Figure 1: Real GDP Growth
Investing in the Asia-Pacific Region
Figure 2: Composition of World GDP
Vertical industry analysis identifies a few sectors believed to be major catalysts for future GDP growth. The designated industries which coincide with the potential, future long-term growth prospects are related to, Information and Communications Technology, Financial Services, New Age Retail and Green Technology. In relation to regional analysis, led by China, the Asia-Pacific will be the leader in these sectors, due to governmental expenditure and policy initiatives.
In addition, the ongoing Industrial Revolution 4.0 is also one highly-correlated factor taken into consideration by companies in their investment decisions. The Fourth industrial revolution which is built on the third, known as the digital revolution, has been occurring since the last century. It is characterized by a fusion of technologies which is blurring the lines between the physical, digital and biological spheres. The velocity of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential pace.
Many industries have already engaged with the introduction of new technologies that create entirely new ways of serving existing needs, significantly disrupting industry value chains. The disruption is also flowing from agile, innovative competitors who gain access to global digital platforms for research, development, marketing, sales and distribution. This can oust well-established incumbents faster than ever by improving the quality, speed, or price at which value is delivered.
A key trend is the development of technology-enabled platforms that combine both demand and supply to disrupt existing industry structures, such as those within the “sharing” or “on demand” economy. These technology platforms, rendered easy to use by the smartphone, convene people, assets, and data – thus creating entirely new ways of consuming goods and services in the process. In addition, they lower the barriers for businesses and individuals to create wealth, altering the personal and professional environments of workers. These new platform businesses are rapidly multiplying into many new services, ranging from laundry to shopping, from chores to parking, from entertainment to travel (Schwab 2016).
The following chapter describes our investment process. The Board, advisors and management team are involved in-depth in each process to ensure that our investments are in line with our investment objectives and strategies.
Sourcing of Investment Opportunities
The Company has a stable deal flow and often has access to proprietary deals based on our successes and the relationship with strategic partners, and advisors. We will continue to seek out and create proprietary deals, and, with our experience and networks, will have the opportunity to invest more significantly in such deals.
Evaluation of Investment Opportunities
A typical investment will be focused on companies seeking expansion round financing. The Company can best contribute to its portfolio companies during this period. In addition, this investment stage offers the best leverage for investment return and enables a larger number of smaller investments providing optimal risk diversification. A typical investment at this stage will be in companies with valuations under A$ 15 million. This valuation stage vastly improves the leverage for companies that achieve successful exit strategies.
Once an investment opportunity is identified, the due diligence process commences. The objective of the due diligence process is to identify attractive investment opportunities based upon the facts and circumstances surrounding an investment and to prepare a framework that may be used from the date of an acquisition to drive operational achievement and value creation. In general, the Manager will focus on the following applicable factors with respect to each proposed investment:
- Depth at executive and operating levels
- Incentive structure
- Experience and references
- Size and projected growth rates
- Competitive landscape
- Product cycles
- Regulatory climate
- Product and customer base
- Distribution channels
- Capital structure
- Supplier relationships
- Financial controls and systems
- Historical financial performance
- Growth plans, cost of growth and potential stress points
- Competitive positioning
- Likely Exit Strategy
Development of Investment Memorandum
After completing the due diligence process, the Manager will prepare an investment memorandum that will present a summary of the proposed investment. The investment memorandum will describe the target business, its management and financial performance, the transaction structure, proposed exit strategies, projected returns and investment risks, as well as include the sensitivity analyses undertaken by the Company.
This memorandum will provide the basis for a preliminary dialogue with investment committee. If the investment committee responds favourably, we will proceed to the negotiation phase of the process.
Negotiation of Investment Terms
We will actively negotiate the terms of a proposed investment. We will identify the key drivers of investment returns and risks in evaluating the attractiveness of an investment and will negotiate the terms of a proposed investment by the Company in an attempt to mitigate these risks.
The management team will submit a final investment memorandum summarizing the opportunity in the proposed company to the investment committee. The investment committee will then conduct a review and discussion of the transaction with the management team and decide if the proposed investment should be recommended to the board of directors. If the board of directors approves the transaction, the Company will proceed to close on the transaction.
Monitoring of Investments
We believe that significant value can be realized for the portfolio companies from active involvement in the Company’s investments. This involvement may include regular consultations with management, participating in corporate governance, assisting management in the development of its business and strategic plans, reviewing budgets and monitoring performance against goals. In addition, the Company may assist portfolio companies with capital raising and acquisition and divestiture activities.
Monitoring and Building Value
We will actively monitor each portfolio investment. Portfolio companies are expected to provide an annual business plan including 5 years financial projections and an annual budget, quarterly financial statements and audited annual financial statements. Through the Directors’ network of relationships and accumulated years of experience, the Manager plans to assist portfolio companies in value creation. Where appropriate, we will help develop business plans and operating strategies. We actively introduce potential strategic corporate partners for licensing, financing, distribution and collaboration opportunities to portfolio companies where beneficial.
Exit from Investments
When making an investment, we will evaluate multiple exit options. Exit strategies may include a public offering, a private sale to a strategic or financial buyer or a recapitalization. An analysis of the exit or the liquidity strategies for each investment will be made as part of the initial evaluation and will be monitored on an ongoing basis throughout the life of the investment.