Being a private equity investor, Kelvin Wu is the founder and principal partner of AID Partners Capital Ltd (AID). The business of private equity funds, simply put, is buying or investing in non-listed companies with a view to reselling them at a good price. Kelvin’s most celebrated feat was the acquisition of HMV’s businesses in Hong Kong and Singapore in 2013. Already teetering on the brink of bankruptcy then, the century-old music chain was brought back to life.
At a time when most people were not hopeful of a bright future for the music industry, why did he have such foresight? ‘I didn’t have the foresight, nor was I optimistic about the future of the music industry,’ with sideburns and beard and wearing an indigo suit and a pair of zebra-striped trainers, he responded humorously. ‘I was only bullish about the strong brand of HMV and its wide customer base, seeing lots of room for manoeuvre.’ Afterwards HMV went on to undergo a transformation with its product lines expanded from CDs and DVDs to cover audio and visual equipment, toys and vinyl records, and eventually food and beverages. The chain’s valuation rocketed by almost tenfold in four to five years.
For Kelvin, a project does not have to be making money at the time of acquisition. The target he sets himself is to turn profitable within 24 months after the takeover. The secret of success lies in the axiom ‘no pain, no gain’. ‘Most private equity funds would take a totally hands-off approach after buying a company, just looking to make a quick buck by the price difference in purchasing and selling. AID, on the contrary, would get deeply involved in the company’s operation and management.’ Take HMV for example, AID set about streamlining its structure, reducing the number of back office staff from over 40 to just six. ‘Lu Xun said he would write while others spent time drinking coffee. I use the time to learn and work while others hobnob over drinks.’
His company has also invested in Legendary Pictures, the film company which produced The Dark Knight Trilogy, Inception, and Interstellar. Notwithstanding box office success being an invariably welcome boon to investors, Kelvin said what he valued the most in a film was the philosophy or life-affirming message it conveyed. “I was particularly happy with Interstellar, a sci-fi film steeped in Buddhist philosophy. So very theosophical. The traditional Chinese view of literature is that it should spread the Way. I think films should do the same too,” he said, stroking the beige malas on his wrist.
Entertainment business aside, AID has also invested heavily in tech companies. In addition to Zoox, which develops driverless-car technology to address traffic congestion in big cities, these companies include Dave.com, a fintech company which saves people from overdrafts and unnecessary bank fees during tough financial times, and the Initial Coin Offering (ICO) of Telegram, an instant-messaging app which announced the launch of its own cryptocurrency at the beginning of the year.
Kelvin remarked that his company had recently forayed into health tech and was planning to devote 70% of its manpower and capital to the field. But why put all the eggs in one basket? ‘In sci-fi films, the arch-villain is usually a pharmaceutical or genetics company. If we don’t get prepared in time and steer the health industry on the right path, the age of evil pharmaceutical companies taking over the world will come sooner than we think.’
‘I founded my companies with the mission to make the world a better place. Making money is just a by-product,’ he said in all seriousness.
Last year, AID acquired GeneSort, an Israeli company that focused on cancer diagnostic and treatment solutions. Only a small amount of cells and tissues are required for diagnosis, and target therapy drugs will help spare patients the pain of radiotherapy and chemotherapy. In a few months GeneSort will join hands with an international insurance company to launch a blood biopsy for detecting early cancers. ‘In future, getting cancer will be like catching cold. Once the early symptoms have been diagnosed, cancer can be cured with just the right mix of drugs. This will be the way forward for health care.’
Intarcia is another health-tech company in which AID has invested. This US company is most famous for its matchstick-sized osmotic mini-pump placed just under a diabetic’s skin to administer the medication on a daily basis. Patients will no longer need to worry if they fail to take their medications or get their injections on time.
On his recipe for success in private equity investing, Kelvin responded with his signature humour, ‘Of course, you’ve got to have money above all else.’ With a changed tone, he added, ‘But, more importantly, you’ve got to have a keen sense of curiosity about the world and a heartfelt desire to change it.’