D2 Capital Partners: Capital Markets Internship

The D2C Capital Markets
Internship Program

“D2C Internship: Immersion into the Capital Markets”

February – May 2010

D2 Capital Partners
Creation ∙ Deployment ∙ Structuring

Onshore Access • Global Platform D2 Capital Partners

D2 Capital is an independent, privately owned, investment and advisory
partnership. It is active across the spectrum of investment assets whilst
simultaneously applying he accumulated global capital market experience of its
team to a diverse range of advisory situations. D2C is encumbered by convention. It
is flexible, focused and innovative in the provision of niche solutions.

Where we fit into the capital process :

I. Creation – we raise capital for companies
II. Deployment – we assist strategic and financial investors with
deployment of capital
III. Structuring – we structure the best-fit, most effective and
innovative solutions

Creation ∙ Deployment ∙ Structuring 2
www.d2capitalpartners.com

I. Executive Summary D2 Capital Partners

TABLE OF CONTENTS  The D2C Internship Program was created as an immersion into the realm of
international capital markets.
I. Executive Summary
 Our aim is to give candidates a taste of high-level finance careers in capital
II. Capital Market Careers markets for the most outstanding graduates.
III. Capital Markets Overview  The D2C Internship Program is an intensive 12 week schedule with extensive
IV. How to Break into the Industry in-class training for required technical skill-sets and heavy involvement doing
real assignments on complex capital market transactions.
V. The D2C Internship
 D2C is proud to present interested candidates in a program catered to create
VI. Appendices the foundation for success of the future leaders in capital markets and
corporate strategy of Vietnam

Creation ∙ Deployment ∙ Structuring

II. Capital Market Careers D2 Capital Partners

TABLE OF CONTENTS
 Benefits to Capital Market Careers
 Top Job Industry
II. Capital Market Careers
 Dynamic Compensation Schemes
III. Capital Markets Overview  Key Jobs in Capital Markets Advisory
IV. How to Break into the Industry  Aspects of Capital Market Jobs
VI. Appendices


Benefits to Capital Market Careers D2 Capital Partners

EXPERIENCE = VALUE
 Compete and work with the most talented, ambitious and competitive individuals
 Interact daily with experienced fund managers, portfolio managers, analysts etc.
 Understand various business models in multiple sectors / industries from CEOs, CFOs etc.
 Understand foreign business culture to build global corporate and investor relationships

VALUE CREATES OPPORUNITY
 Vastly enhance one’s chances of obtaining an MBA at top universities
 Fast-track oneself into a role as CEO or CFO of a corporate entity
 Launch oneself into an international career
 Build important domestic business relationships
 Apply knowledge and experience in investments to raise funds for:
 Establishing an investment fund
 Starting a venture business
 Helping companies expand, grow and become regionally/globally competitive


Top Job Industry D2 Capital Partners

Competitive Job Industry Globally…
 “Bulge-bracket” I-banks, leading hedge funds, Private Equity Groups are extremely selective and competitive
 Graduates from top schools (i.e.: Harvard, MIT, Stanford, Berkeley, Wharton, Columbia etc.)
 Highest academic achievements (i.e. honors, awards , dean’s list etc.)
 Overachievers and leaders (i.e. presidents of business / finance clubs , associations etc.)
 Possess comprehensive financial knowledge prior to graduation to prepare for interviews
 Able to navigate challenging interviews (i.e.: How many ping-pong balls can fit into a Boeing 747 Jet?)
 Confident, outspoken and articulate; No indications of weakness

Commodity Job Locally…
 Retail client focused, lack institutional experience
 “Stamp factory” job – expect to be processing not creating
 Propensity to Job-hop – little continuity of experience or direction
 Little English language requirements – reflective of standards
 Don’t expect to provide much valuable input – Most retail investors in VN would rather trade themselves
 Most companies in VN would rather raise capital themselves rather than rely on a local securities company
 Illegal activities the norm – such unprofessional ethics would get you fired in a global firm
 Expect limited global exposure or internationally transferable experience


Dynamic Compensation Schemes D2 Capital Partners

One of the Most Lucrative Careers…
 Highest paid professional career for undergraduate degrees in the West
 Best way to get rich besides being an illegal con-artist, inheriting money from your family,
being a famous celebrity/musician/athlete or starting your own business
 Fresh graduate Analysts at global Investment Banks start at $100K+ in annual comp
 Managing Directors make millions of dollars from annual bonuses

Fortunately, opportunities in Vietnam do exist…
 Bonus compensation based on performance while salaries highly competitive with most
other professional industries
 Given its low base, Vietnam’s capital markets have potential for high growth and hence
higher pay whilst already offering some of the highest compensation packages
 If one has the international caliber skill-sets, professional ethics and determined attitude,
investment banks and funds in the region will poach and handsomely pay talent to
enhance their Vietnam coverage


Key Jobs in Capital Markets Advisory D2 Capital Partners

Skill-sets ,Personalities &
Roles Description
Traits
• Work directly with companies • Diligent and focused
Advisory / • Structure transactions • Willing to work long hours
Corporate • Originate investments • Business model oriented
• Analyze valuations • Opportunistic
Finance • Focus on primary markets
• Manage relationships with investment funds • Sociable
Institutional • Initiate investment ideas and strategies with
investors
• Early birds
• Sales oriented
Sales • Focus on secondary markets • Articulate
• Opportunistic
• Manage principle positions’ risk • Quick thinking
• Create liquidity – Market makers • Quantitative prowess
Trading • Focus on secondary markets • Calm and decisive
• Disciplined behavior
• Early birds
• Focus on secondary markets • Analytical expertise
• Recommend investments • Theoretical aptitude
Research • Create visibility of companies • Superb verbal dexterity
• Provide impartial advice • Opinionated
• Analyze valuations


Aspects of Capital Market Jobs D2 Capital Partners

Qualitative Analysis Structuring
• Research Industries • Transaction legality
• Evaluate strategies • Terms & Conditions
• Analyze business models • Investor protections
• Write business plans / offering • Hybrid financing
memorandums & prospectuses • Imbedded derivatives

Quantitative Analysis Sales & Marketing
• Valuation Models • Pitch book presentations
• Financial Forecasts • Networking (investors, execs)
• Earnings Models • Meet company executives
• Quant Models • Investor / company road shows
• Attend / host conferences


III. Capital Markets Overview D2 Capital Partners

TABLE OF CONTENTS  What are the Capital Markets?
 What is Investment Advisory?
 Organizing the Clutter in Capital Markets
 Venture Capital & Private Equity Investments
III. Capital Markets Overview  More on Venture Capital: Incubation
IV. How to Break into the Industry  Mergers & Acquisitions (M&A)
 Sell-Side Advisory: Managing the Capital Raising Process
 Buy-Side Advisory: Capital Deployment Strategy & Execution
VI. Appendices  Restructurings & Divestments: Shedding Fat for Leaner Growth
 Our Partnership Lasts Throughout the Entire Company Lifecycle


What are the Capital Markets? D2 Capital Partners

• Stocks • Treasury Bonds
• American Depository Receipts (ADRs) • Corporate Bonds / Debentures
• Exchange Traded Funds (ETFs) Fixed • Commercial Paper
Equity • Bankers Notes
Income

• Swaps Alternative • Real Estate
• Futures Derivatives • Venture Capital
Assets
• Options • Private Equity
• Warrants • Currencies
• Convertible Securities • Commodities

We advise on transactions across nearly all asset classes…
The capital markets…
 Facilitate efficient avenues for raising and deploying capital
 Allow investors and companies to realize the value of their assets
 Create mechanisms for transparency in market price
 Offer a diverse array of financial structures suitable to investors and companies
 Provide access to international financing channels and investment opportunities


What is Investment Advisory? D2 Capital Partners

Creating access to capital and investment opportunities…
 Act as intermediaries in raising and deploying capital for companies and investors
 Enhance companies’ credibility to investors in accessing international capital markets
 Market (“Pitch”) investment opportunities to companies and investors
 Map, source, and analyze investment opportunities across all industries and sectors
 Structure investment transactions (“deals”) to the needs of counterparties

Sell-Side Buy-Side
Sell-Side Buy-Side
Advisory Advisor Advisor
Advisory

TRANSACTION:
Mergers & Acquisitions
SELLER: BUYER:
Leveraged Buyout
Private Company Private Company
Initial Public Offering
Public Corporation Public Corporation
Secondary Market Trade
Investment Fund Investment Fund
Private Equity
Venture Capital


Organizing the Clutter in Capital
Markets… D2 Capital Partners

Myriad of Services… We Manage, Structure & Package…

CREDITORS
ACCOUNTANTS LAWYERS

CREDITORS CONSULTANTS
CONSULTANTS CLIENT ACCOUNTANTS
INVESTMENT
ADVISOR

LAWYERS
CLIENT


Venture Capital & Private Equity
Investments D2 Capital Partners

From VC to PE, we help accelerate the growth path Venture Capital involves start-up and early stage
through growth capital raises… companies requiring funds for growth

 PURPOSE: Raising growth capital:
 At the earliest stages of the life-cycle
 Forging synergistic relationships between
companies Growth Cash Flow
Start-up
 Structure financial investment partnerships to Company Positive
prepare a company for IPO exit
 D2C ROLE: We act as both advisors to
buyers and sellers, management in our
principle investments and consultants in Private Equity involves private profitable companies
post-deal monitoring services seeking expansion capital or strategic partnerships
 COUNTERPARTIES: We advise companies
in raising capital or advise private equity Financial Strategic
investors in their deployment strategy. Investment Partnership

 PROCESS: We in assist in designing
business plans, writing information
memorandums, building financial models Seller
and drafting term sheets


More on Venture Capital: Incubation D2 Capital Partners

Leveraging Vietnam’s Entrepreneurial Spirit Aiming to be the leading business partner
 PURPOSE: Create and start new ventures
 D2C ROLE: Apply creative intelligence,
Domestic
vast network and market knowledge to Partners
starting, funding and managing new
ventures
 COUNTERPARTIES: Foreign / domestic
investment funds, domestic / foreign
companies, local / expat professional Professional New Investors

Venture
experts / management Management

 PROCESS: Develop the business plan,
build financial forecasts, research the
target market, hire management team,
establish local and foreign partnerships,
Foreign
obtain licensing, connect customers and Partners
raise venture capital.


Mergers & Acquisitions (M&A) D2 Capital Partners

To partake in Vietnam’s across-the-board growth curve, MERGERS are the combination of two companies into one
strategic interest is driving M&A demand… larger entity…

 PURPOSE: Assist global / domestic
Company
companies structure partnerships via: A

 Direct purchase of ownership
 Issuance of new shares for growth capital Company
 Setup of new Joint Ventures A-B
 D2C ROLE: We act as advisors to either Company
the buyer seeking acquisition targets or B

sellers requiring strategic partners
ACQUISITIONS are the purchases of part or all of an asset
 COUNTERPARTIES: Transactions involve or company by another company…
global and / or domestic companies
acting as either buyers / sellers
 PROCESS: The scope of work requires Acquirer
extensive preparation of investor
documentation, regulatory filings,
Target A Target B Target C
financial due diligence, marketing
(90% Stake) (100% Stake) (70% Stake)
materials and road-shows spanning
many months and even beyond a year


Sell-Side Advisory: Managing the Capital
Raising Process D2 Capital Partners

DOCUMENT PREP (3 – 4 WEEKS):
• Draft Business Plan / Investment Memo
• Financial Forecasts
• Valuation Model

NEGOTIATIONS (2 – 4 WEEKS): MARKETING PREP (1 – 2 WEEKS):
• Finalize Purchase Agreements • Finalize Potential Buyers List
• Finalize Shareholder Agreements • Draft Teasers
• Obtain regulatory approvals • Write and Coach Investor Presentation

DUE-DILIGENCE (6 – 12 WEEKS): MARKETING (3 – 4 WEEKS):
• Management Meetings • Teaser Dissemination
• Facility Tours • NDA & Investor Document Release
• Data Room Visits • Presentation to Investors

BIDDING PROCESS (1 – 2 WEEKS):
• Determination of Final Round Investors
TOTAL TIME FRAME:
• Draft Term Sheet 16 – 28 WEEKS
• Coordinate Investor Due-Diligence


Buy-Side Advisory: Capital
Deployment Strategy & Execution D2 Capital Partners

INDUSTRY / SECTOR ANALYSIS:
• Determine industry / sector trends
• Segment value-chains
• Identify growth drivers
TARGET MAPPING:
Locking in • Categorize key players
• Matrix SWOT and comparable metrics
the Target!!! • Short-list preferred targets
COMPANY MEETINGS / PROFILES:
• Gather key operating metrics
• Business model descriptions
• Trends and developments
INVESTMENT DUE DILIGENCE:
• Stress test forecast assumptions
• Comprehensive valuation models
• Coordinate legal due diligence
NEGOTIATIONS & STRUCTURING:
• Customize deal structure
• Buffer hostility through intermediation
• Negotiate buyer’s terms & conditions


Restructurings & Divestments:
Shedding Fat for Leaner Growth D2 Capital Partners

Sometimes more is less; Allocate capital where it grows best
Need capital to fund growth but don’t want to sell equity or raise debt?
Not enough management resources to scale higher growth core business?
 Restructurings allow companies to unlock capital trapped in underperforming assets
 Divestments in businesses where management is inexperienced to focus on core growth
 Immediate value creation that can be realized by the capital markets (i.e. stock price)

Non-Core Asset
Pre-Asset Post-Asset
Disposal Disposal
Ca$h Proceeds


Our Partnership Lasts Through-out
the Entire Company Lifecycle D2 Capital Partners

Restructurings /
M&A Divestments
• Takeovers • Asset Disposal
• De-listing
Listing • Carve-outs
• Consolidation • Privatization
• Initial Public Offering
Private Equity (IPO)
• Secondary Issuance
• Capital Raise
• Strategic Partnership

Venture Capital
• Start-Up
• Early Stage


IV. How to Break into the Industry? D2 Capital Partners

TABLE OF CONTENTS
 Preparation is Vital
 Sample Résumé
III. Capital Markets Overview
IV. How to Break into the Industry
VI. Appendices


Preparation is Vital D2 Capital Partners

ESTABLISH FUNDAMENTAL KNOWLEDGE
 Extensive research into careers in investment banking – Read vault career guides, wet feet
 Be up to date on the local and global news (i.e. wallstreet journal, barons, bloomberg, vietstock etc.)
 Read research reports and macro analysis (i.e. Investors Insight, Morningstar, PIMCO etc.)
 Understand technical financial theory (i.e. Investopedia, “the intelligent investor”, CFA etc.)
One does not necessarily have to have a finance degree; Applicable finance is self-taught or trained on
the-job; in fact, many finance professionals have non-finance backgrounds (i.e. engineering, pharmacy)

ACCUMULATE INDUSTRY RELEVANT EXPERIENCE & SKILLS
 Build technical skills on valuation modeling in excel (i.e.: Training The Street, Wall Street Prep etc.)
 INTERNSHIPS!!! Gain experience with asset managers, investment banks, securities companies
 Network by attending industry conferences, seminars; utilize linked-in, doostang, CFA societies
 Invest yourself – Putting a little money to work is a fast way to learning hard-earned lessons
Ultimately, be prepared to begin high-level value-added work upon hire; Distinguishing oneself by having
the experience and skills at the beginning is a sure way to improving your chances of being hired. Having
a polished resume is key to being an outlier in the application process.


Sample Résumé D2 Capital Partners

John Smith <> 9999 Cherry Boulevard <> Cambridge, MA XXXXX <> USA<> (001) (555) 555-5555 <> John.Smith52@gmail.com
EDUCATION:
Top University – B.A. Economics [Cambridge, MA 9/2005 - 6/2009]
Cumulative GPA: 3.9 Major GPA: 4.0
Top University of Singapore, Education Abroad Program [Singapore 8/2006 - 12/2006]
CFA Level I Candidate
PROFESSIONAL EXPERIENCE:
Analyst (Intern), ABC Private Equity Group, LLC [Cambridge, MA 02/2008 – 6/2009]
ABC Private Equity Group, LLC located in Cambridge, CT, is a global private equity fund of funds advisory group servicing institutional investors in private equity
 Analyze private equity fund manager performance using proprietary analysis model.
 Apply thematic investment assumptions to calibrate outperforming private equity funds and allocation strategies for superior risk-adjusted returns.
 Update and maintain database of proprietary private equity data and information to conduct trend analysis.
Summer Analyst (Intern), 123 Partners – Mergers & Acquisitions [Manhattan, NY 7/2008 - 9/2008]
123 is a global Investment Bank specializing in M&A Advisory, underwriting, research and institutional brokerage services.
Worked intimately with Managing Directors to source two potential deals currently in the process of entering the firm’s deal pipeline.
 Met with executive management (i.e.: CEO, CFO, COO etc.) at over 30 companies to understand key operations for potential growth and upcoming projects
 Supported analysts on building pitch books and conducting research.
 Wrote an internal thematic project on M&A investment strategies for the Managing Directors.
M&A Research Analyst (Intern), Acme Partners, Inc. [Boston, MA 6/2007 - 6/2008]
Acme Partners is a specialized mergers and acquisitions firm serving the middle market. GPI leads in executing strategic acquisitions.
 Researched industries/companies for growth opportunities in: Aviation, Waste, Food and Beverage, Manufacturing, Contract Packaging, Logistics, Pharmaceuticals
 Called company CEO’s, CFO’s as well as utilized internet resources and online databases to determine scale, scope and details of operations
 Updated and added information of over 1,000 internal company reports to the proprietary database to source deals for firm principles.
INTERESTS:
Chancellor and Member, the Professional Fraternity of Alpha Alpha Alpha [Cambridge, MA 6/2007 - 9/2008]
Alpha Alpha Alpha is a professional fraternity organized to foster the study of business in universities. The fraternity has over 300 chapters and over 500,000 members
 Arbitrated risk management and interpreted bylaw compliance measures to ensure best practices and operations.
 Organized, directed and facilitated efficient general body meetings and procedures while cutting time by over 50%.
 Restructured corporate configuration to formulate business strategy and improve effective operations in corporate sponsorship.
Portfolio Manager and Member, Top University Student Foundation Investment Committee [Cambridge, MA 4/2006 – 6/2009]
The Student Foundation Investments Committee is responsible for the management of the Student Foundation's $10m endowment.
 Managed weekly equity market discussions and decisions in managing entire endowment portfolio.
 Built comps, DCF and LBO valuation models on companies considered for investments.
 Maintained quantitative asset allocation and risk management model for endowment portfolio.


V. The D2C Internship D2 Capital Partners

TABLE OF CONTENTS
 Introducing the Internship
 Internship Purpose
 Internship Description
III. Capital Markets Overview  In-Class Training Schedule
IV. How to Break into the Industry  On-the-Job Soft-Stills Training
 Work Environment at D2C
 Candidate Requirements
VI. Appendices  Not an Office Assistant Position
 Application Procedure


Introducing the Internship D2 Capital Partners

 D2C seeks dynamic and energetic team members to help us grow whilst
providing impeccable service to our clients.

 Our entrepreneurial environment is founded on our groups’ enthusiasm
and diversity to synergize and leverage all participants’ contributing
strengths.

 We seek ambitious individuals driven to outperform and execute across
all areas of businesses to provide the insightful strategic advice for our
clients’ capital allocation decisions.

 These are high level capital markets programs involving candidates in the
entire transaction process: analysis, target selection, valuation,
structuring and post-deal monitoring.


Internship Purpose D2 Capital Partners

 The internship is meant to provide interns with a foundation
of applied experience in capital markets advisory: M&A,
private equity, venture capital etc.

 The pragmatic approach of the internship is meant to
provide interns with advanced skills transferrable to any
firm, whether financially focused or not.

 Exemplary performance may lead to full-time job
placements with D2C as we seek the most talented
individuals to join our team.


Internship Description D2 Capital Partners

RESEARCH FOUNDATION
 Analyze Industry / Sector trends, growth drivers and investment opportunities
 Map major players, matrix competitive quantitative and qualitative metrics
 Prepare and attend management meetings, agendas and questions
 Evaluate M&A targets and market entry considerations for new ventures
 Conduct macroeconomic updates for analytics and presentation purposes

TRANSACTION FOCUS
 Assist team with drafting pitch book presentations
 Aid in writing industry due diligence reports
 Build public / acquisition valuation comps models in excel
 Build forecast assumptions and models for new ventures and start-up companies
 Support D2C team in any and all aspects of the transaction process from pitch to close


In-Class Training Schedule: D2 Capital Partners

SUBJECT SESSIONS
APPLIED RESEARCH 2
INTRO TO VIETNAM MACRO 1
BUILDING PITCH BOOKS 1
INTRO TO INCOME STATEMENT 1
INTRO TO BALANCE SHEET 1
INTRO TO CASHFLOW STATEMENT 1
FINANCIAL STATEMENT ANALYSIS 1
INTRO TO EXCEL 1
PUBLIC COMPS ANALYSIS 2
ACQUISTION COMPS ANALYSIS 2
M&A TRAINING: BUSINESS OF M&A 1
M&A TRAINING: SELL-SIDE 1
MACROECONOMIC INDICATORS 1
EMERGING MARKET MACROECONOMIC ANALYSIS 1


On-the-Job Soft Skills Training D2 Capital Partners

Professional E-mail, Fax, Letter, Phone / Conference Call Protocol

Interacting with foreigners at D2C, Investors and MNCs

Communicating with executives in Vietnam and abroad

Presentation / speaking skills through weekly updates

Teamwork / collaboration on assignments and tasks

Time management through constant deliverables and due-dates

Multi-tasking on various projects

Managing pressure under stressful situations and tight deadlines

Discussion and debate on various topics challenging critical thought process


Work Environment at D2C D2 Capital Partners

Steep Learning • Constant Reading: News, reports, memorandums, presentations
• Constant Training: In-class and on-the-job
Curve • Constant Preparation: team discussions, company meetings

Young, Global & • Young principles and management team
• International Mix: US, UK, Canada, HK, VN
Dynamic • Global and domestic client base

Intellectual Capital • International and local guidance (Nearly 40 years combined)
• Opinions, ideas, strategies and recommendations strongly encouraged
Encouraged • Inquisitive curiosity and thirst for knowledge and solutions desired

• Multi-tasking on multiple projects
Fast Paced • Tight deadlines and deliverables
• Fierce competition

• Social activities, active participation and inclusive involvement
Family Culture • Trust, accountability and responsibility required
• Leverage, scale and growth oriented


Candidate Requirements D2 Capital Partners

 Resourcefulness; ability to find information; keen intellectual curiosity
 Proficiency in Microsoft Applications (i.e. Word, Excel, PowerPoint)
 Basic understanding of Financial Statements
 Ability to read, write and speak professional business English
 Creative, innovative and imaginative thought process
 Diligent work schedule
 Accountability & Dependability
 Excellent organizational capacity
 Professional / urbane manner
 Strategic, structured mindset


Not an Office Assistant Position… D2 Capital Partners

Not about getting coffee
Not about filing papers
Not about ordering supplies
Not about admin work

We are looking for value-added contributing
team members


Application Procedure D2 Capital Partners

Please send (1) resume / CV, (2) cover letter
and (3) indication of academic achievements
and courses obtained.
Direct all applications by email to Ian
Nguyen, Vice President, at
ian@d2capitalpartners.com
Please kindly cite: “CAPITAL MARKETS
INTERNSHIP” in subject line


VI. Appendices D2 Capital Partners

With more than forty years of combined, international, capital
market experience, D2C is defined by Capital :

 Creation
 Deployment
 Structuring


The Scope of Our Partnership D2 Capital Partners

Mergers & Acquisitions
VC and PE Investment
Business Plan Preparation
Capital Structuring
Deal Negotiation
Due Diligence
Industry Mapping & Competitive Analysis
Post Deal Monitoring
Strategic Advisory


CAP MKT UPDATE : What Has Changed D2 Capital Partners

The Bad News
 VN remains on periphery of regional investment universe
 Risk appetite of overseas funds for high risk, emerging assets is still
depressed
 The quality of onshore capital market advisors lags far behind that of
lawyers and accountants
The Good News
 Strategic investor interest is rising
 Specialist financial investors get more access opportunity
 Funding costs are low
 Less noise = more deals can be done but …
 Preparation and structuring is critical


Dependent on Leverage to Grow D2 Capital Partners

Far from Pretty… Credit Cycle Returns…
 400bps interest rate subsidy ending in 2010 120 USD Loan Outstanding… 60%
100 YOY Loan Growth rate 50%
 FDI funding channels impaired
80 40%
 FX Reserves down 27% (USD16bn) 60 30%
 Current account deficit approaching 15% of 40 20%
20 10%
GDP
0 0%
 Budget deficit facing pressure

FDI Absorption Limitations… Leveraged Growth…
USD Billion % FDI [Disbursed] / GDP Government 2009
100% 140%
% FDI [Disbursed] / FDI [Announced] guidance 131%
120%
80% contrasts with
trend 100% Loan to GDP (%) 107%
60% 80% 93%
71%
40% 60% 66%
59%
40%
20% 39% 43% 48%
20% 28% 35%
20% 18% 19%20% 20%
0% 0%

SOURCE: Reuters, Bloomberg, GSO, D2C Research


Poor Access + Uncertain Legal Framework = D2 Capital Partners

Vietnam M&A Slowdown… Declining Capital Flows…
Units in 1H 2009 1H 2008 % Change 2000 20
USD bn M&A M&A
1500 15

USD millions
World 914.04 1,573.33 -41.9%
1000 10
USA 289.36 569.07 -49.2%
China 38.29 62.33 38.6% 500 5

SE Asia 18.56 49.94 -62.8% 0 0
Vietnam 0.23 0.471 -50.7% 2003 2004 2005 2006 2007 2008
Total Value (USD mn) Average Deal Value

Vietnam Has Seen V Little … Shrinking Size …
70,000 -38.6% YoY 60.0 -61.5% YoY
60,000 50.0 -22.5% YoY
-62.8% YoY
50,000

USD millions
40.0
USD millions

40,000
-50.7%% 30.0
30,000 -76.3%
YoY 20.0
20,000 YoY
10,000 10.0

0 -
China SE Asia Vietnam China SE Asia Vietnam
Transaction Value (1H 2009) Transaction Value (1H 2008) Average M&A Deal Size 1H 2009 Average M&A Deal Size 1H 2008

SOURCE: Reuters, Price Water House Coopers, D2C Research


Rational Behaviour, Finally D2 Capital Partners

Investors into VN are more cautious, and getting much better
prepared, than at anytime in the past .

 Competitive and industry analysis
 Substantially more comprehensive terms, reps and warranties
 Detailed due diligence
 Post Deal monitoring

This requires that sellers/founders/shareholders step up to the
challenge and meet these needs if they want the capital.


Improving Probability of Completion D2 Capital Partners

Preparation is Key Seek Professional Help
 Detailed Business Plan  Improve credibility
 Growth strategy  Expedite investment process
 Use of proceeds  Magnify marketing coverage
 Clear exit options
 Outsource non-core competencies
 Financial Forecast Model & Valuation  Enhance position in negotiations
 De-risked model assumptions
 Return profile sensitivities
 Expand financing options
 Structure  Receive expert coaching
 Equity, Debt, Hybrid  Obtain protection

Flexible Pricing Transparency
 Convey rationality  Expect post-deal monitoring by
 Understand / Satisfy your partner Partner or third-party contractors
 Bridge the gap  Solidify trustworthy relationship
 Opportunity cost / Time value  Instill culture of Corporate Governance
 Loosen terms & conditions  Leverage network synergies
 Engineer alternative financing  Minimize misunderstandings


What Investors Look for in
Management D2 Capital Partners

 Vision
 Does the entrepreneur see the long-term picture and all the steps need to get there?
 Scale
 Can the entrepreneur attract dedicated talent?
 Willing to share rewards of success?
 Innovation
 Does the entrepreneur understand the future of his industry?
 Leader or follower?
 Courage
 Understanding failure is part of the process
 Persistence
 Able to execute framework to success despite obstacles along the way
 Principles
 Does the entrepreneur maintain a credible relationship with customers and suppliers?
 Succession
 Is the entrepreneur willing to groom his/her successor for the sake of the company?


Most Common Deal Tripwires D2 Capital Partners

Deals tend to flounder on a regular series of factors, many of which
may be international practice - but in VN it is all innovation …

 Emotional Seller Premium
 Contingent Risks – especially from earlier raise
 Validity of Documents – are licenses even real ?
 Failure to Launch – understand the need
 Veto Rights – some things require permission
 Options – to put or call

Avoid/fix these and your chances just improved sharply


Case Study 1: Proactive Preparation D2 Capital Partners

Easing Investor Pain Strategic sales still attractive
Background 4.30% IPO
4.30% Trade Sale
CONTEXT: 13.10% 30.40%
Secondary Sal
Strategic Investors in Education, Media, Alternative Energy MBO
and Construction Materials, sought / seeking potential JV Refinancing
and / or M&A targets in Vietnam. 26.20% Other
21.70%
PREPARATION: Most Attractive /
 Macro Overview Achievable Exit Strategy
 Industry Analysis
 Sub-sector analysis
 Competitive Analysis
Key Takeaways
 Target DD  Lack of information hindering deals
requiring strategic investors to pay for
STRUCTURE: professional insight and intelligence.
 Potential JVs  Companies providing better cooperation
 M&A calm investor concerns
EXECUTION:  Strategic Investors are actively preparing
 Industry / Sector mapping, interviews for potential partnerships and so should
 Potential JV Partner / Target Negotiations interested companies: improve your ranking
on investors’ list of priorities!

SOURCE: Grant Thornton Private Equity Survey 2009, D2C Research


Case Study 2: Professional Help D2 Capital Partners

Appear Serious Addressing Investor Concerns
Transparency in business activities
Background 2.00%
Operational / Cultural Fit
4.10% Growth story / Forecasts

CONTEXT: 4.10%
4.10%
22.40%
Target's management support
Strategic fit
FMCG distributor & retailer sought equity capital raise to 8.20%
Cash flow
expand into mass distribution. Regulatory hindrances in 10.20% Speed which value can be created
sensitive sector to foreign participation required extensive 18.40% Tax shields and investment savings
Brands / Products
professional advice. Transaction closed in <3 months 12.20%
Track record
14.30%
PREPARATION: Investor Concerns When
Investing in Vietnam
 Investment Teaser
 Business Plan Formulation
 Detailed Forecasts & Valuation Model Key Takeaways
 International caliber work and document
STRUCTURE: packs enhanced management credibility
 Straight Equity
 Convertible Bond (Loan) Bridge Financing
 Professional sell-side advisory services
Call Option for Ownership Rights to FMCG Co.
ensured necessary provision of information
to investors for faster decision turnaround
EXECUTION:  Structuring advice provided multiple
 Investor Road Show solutions to potential deal killers
 Term Sheet Discussions  Coaching of management enhanced
negotiation techniques with investors


Case Study 3: Flexible Pricing D2 Capital Partners

Structuring Investor Returns Returns Attract Investors
Background 4% IRR obtained on exit
8% Dividends received
CONTEXT: 8%
Successful integration
Professional Services Company sought capital raise with
structured equity bonus conversion feature. 13% Improved revenue
67%
PREPARATION: Cost savings
 Investment Teaser Measuring Investment
 Business Plan / Investment Memorandum Drafting Success in Vietnam
Investor Presentation & Coaching
 Detailed Forecasts & Valuation Model
Key Takeaways
STRUCTURE:  Detailed strategy & model frame-worked
 Standard Terms & Conditions and expedited discussions
 Convertible Bond  Management flexibility and rationality
 KPI Benchmark Bonus Equity Kicker instilled greater trust in management
EXECUTION:  Return windfall protection alleviated
 Investor Road Show investor concerns
 Term Sheet Structuring  KPI benchmark linked performance ensured
 Negotiations alignment of interests with investor



Case Study 4: Corporate Governance D2 Capital Partners

The Truth Reveals Itself Being fair and open matters
Background Corporate Governance

15.70% Skills / Experience of
CONTEXT: 21.40% existing management
Well established and rapidly growing services company Lack of transparency
11.40%
sought equity capital for new venture; however, clause in
11.40% 21.40% Finance / debt issues
shareholders agreement from previous investor presented
considerable risk and liability to new investors.
18.70% Important Investment
PREPARATION: Considerations / Factors
 Investment Due Diligence Report
 Model Assumptions Sensitivity Testing
 Legal Due Diligence Report Key Takeaways
 Unwillingness to provide full transparency on legal
STRUCTURE: documents can endanger deal
 Standard Terms & Conditions  Eventual cooperation by management lead to a
 Straight Equity at Holdings Group Level partnership with the new investor for MBO / LBO
 MBO / LBO carve out at Subsidiary Level of existing shareholders in Holdings subsidiary
 Offshore investors now requiring extensive
EXECUTION: professional due diligence support and buy-side
 Location Inspections advisory services.
 D2C Supported Negotiations  Third party post-deal monitoring also becoming of
greater importance to offshore investors with
limited man power, experience and resources in VN


Background Information D2 Capital Partners

Spencer White, CFA (sdw@d2capitalpartners.com; +84 907 009 112)
 Spencer is a co-founder and Managing Partner of D2 Capital Partners.
 Prior to D2C, Spencer was an Executive member of the Board of TVS, a start up Investment Bank in Vietnam, leading its
nationwide growth for two years.
 Prior to TVS Spencer was a Managing Director of Merrill Lynch. Having joined the Asia Pacific Group in 1999 he became
the Chief Regional Equity Strategist in 2001. Previously, Spencer was the Country Head for Taiwan.
 Prior to joining Merrill Lynch, Spencer was an Associate Director with AIB Govett Asset Management in London and before
that he served as an investment manager with Hambros Bank, investing in both large- and small-cap Japanese companies.
 Spencer received a First Class Honors degree in Management Science from the University of Warwick and he has been a
CFA Charter Holder since 1997.

Christian Leitzinger, MBA (cwl@d2capitalpartners.com; +84 902 250 393)
 Christian co-founded D2 Capital Partners in 2009 and is Managing Partner.
 Prior to D2C, Christian joined TVS in 2007 heading the Institutional Client Group as Managing Director; servicing domestic
and foreign institutional investors in the Vietnamese equity and bond markets.
 Prior to TVS, Christian was a Director at CIBC Oppenheimer World Markets (Canada). Having joined the US Equity Sales
team in 1999, he rose to manage the team by 2004. His role was to aid Canadian institutional investors in allocating
capital within the US and China.
 Prior to joining CIBC Oppenheimer World Markets, Christian worked on the investment side at Mackenzie Financial
(USD40bn AUM) and O’Donnell Investment Management (USD2Bn AUM) investing in mid/small-cap Canadian companies.
 Christian received a Bachelor’s degree from McMaster University in Canada, and an Executive MBA from the Kellogg
School of Management (Northwestern University, Chicago).


Contact Information D2 Capital Partners

Vietnam Office:
5th Floor, Nam Minh Long Building
61A Vo Van Tan, District 3
HCMC, Vietnam

Spencer White, Managing Partner Christian Leitzinger, Managing Partner
Email: sdw@d2capitalpartners.com Email: cwl@d2capitalpartners.com
Mobile: +84-907-009-112 Mobile: +84-902-250-393
Ian Nguyen, Vice President Tat Sun Ho, Vice President
Email: ian@d2capitalpartners.com Email: tat@d2capitalpartners.com
Mobile: +84-934-164-716 Mobile: +84-121-728-8080


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