Teams play crucial role in business diligence

THE value proposition of private equity firms is to figure out ways in which to create value in the investments they make.

Hence these firms typically have in-house teams that work as “consultants” to the companies in their portfolio although the depth and skills of such assistance varies.

Creador is no different.

Called “Creador+”, the team is headed by Kevin Loh, who had spent more than 10 years at Boston Consulting.

Loh explains that his team of seven plays a crucial role in the “business diligence” part of a deal, where they seek to validate the business overview and growth opportunities of the investee company. Plans are drawn out on how a company could do better or expand regionally, working with the exising management of the target company.

In the case of CTOS Data Systems Sdn Bhd, Creador has assigned two full-time consultants from Creador+ to work with the company that it holds a controlling stake.

“One of them was acting as an interim CEO until Eric (Chin) join us as a full time CEO.

“In that instance, we really ensure that the initiatives we want to push are in place,” he says.

When the investment is non-controlling, Creador+ monitors the progress of the company as the latter would already have strategies and plans that are in line with Creador’s.

It will also support its portfolio companies’ targets and initiatives set.

In some cases, the team is instrumental in bringing in joint ventures, helping the businesses to expand overseas, identifying new profitable areas as well as reducing costs.

As for Bonia Corp Bhd , the team helped the company to strategise its entry into Indonesia as well as to negotiate for retail space in a mall there.

“It really depends on what the company needs. We could be helping out in hiring key senior management or helping it to find the right entry strategy or partner for a new market,” says Loh.