gsassetmanagement.docVIP

GS ASSET MANAGEMENT Introduction “Hello……” “Sawadee” “Hello. This Peter Lim’s from BEB. May I speak to Mr Kaaampool Adsasahfdkj” Silence. “Kaaampoool Adsavlikaii…” “Ring!Ring!” “Sawadee” “Kammpul Adsav….?” Click. Not being able to pronounce Thai names and not being able to get hold of the person he needed to speak with were the least of Peter Lim’s problems. He had other more pressing issues that needed to be resolved quickly. A week ago, his boss Hans Schmidt had handed him a disorganized folder with financial information on an asset management company called GS Asset Management (GSAM) in Thailand. He had asked Peter to get in touch with the CFO and the CEO of the company to get more information and prepare a proposal recommending if BEB should buy a 25% stake in the company and how much they should pay for it. The proposal would be sent to the banks head office in Europe and a decision would be made on the basis of his analysis. The task would have been relatively easy was it not mid-January 1998. The Asian Financial Crisis that started about 6 months earlier had created and environment of uncertainty, volatility, panic and risk. It appeared to be a good time to buy, the markets had crashed, the Thai Baht was cheap and regulators in East Asian countries were opening their once closed or partially opened doors to foreign investors in a bid to save their ailing companies. But what if the markets had not bottomed out? What if BEB bought a stake and in 3 years Thailand decided it did not like foreign ownership of local assets? What if the Baht depreciated further? What if this was just a bad company up for sale? Was there value here? The Asian Crisis South East Asian countries experienced tremendous growth during the last two decades. This progress has positioned these countries as the example for other emerging markets. Moreover, the world community calls them the “Asian Tigers” for the success they have achieved. After all