Goutama Bachtiar Investment Advisor, Global Innovations and Technology Platform ASEAN-JIF, 14 June 2013 Angel Investor’s View on ASEAN Common Fund for Startup

Rehearsing Common Fund Term A form of collective investment scheme A form of collective investment scheme Based on contractual law Based on contractual law Managed as a single portfolio with individual beneficiaries receiving returns proportionately Managed as a single portfolio with individual beneficiaries receiving returns proportionately Property is managed as a whole by or on behalf of the operator of the scheme Property is managed as a whole by or on behalf of the operator of the scheme Contributions, profits, payments, income are to be made to them are pooled Contributions, profits, payments, income are to be made to them are pooled

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Common Fund Advantages Co-incubation and Co- Investment Co-incubation and Co- Investment Mentors and Experts Mentors and Experts Best Practice Model Best Practice Model Information and Database Information and Database Training for investment manager, start-up companies Training for investment manager, start-up companies Reduction in investment risk by diversification Reduction in investment risk by diversification

Common Fund Advantages (cont’d) Economies of scale and operational efficiencies Economies of scale and operational efficiencies Resulted in a lower cost base for the investment manager Resulted in a lower cost base for the investment manager Tax efficient Tax efficient Administratively simple Administratively simple Strengthening country/entities coordination Strengthening country/entities coordination Reduction in investment risk by diversification Reduction in investment risk by diversification

Common Fund Advantages (cont’d) The more diversified our capital, the lower capital risk The more diversified our capital, the lower capital risk Indirectly reduced currency risk Indirectly reduced currency risk Systematic risk avoidance by investment in different non- perfectly-correlated asset Systematic risk avoidance by investment in different non- perfectly-correlated asset Reduced dealing costs Reduced dealing costs

Common Fund Advantages (cont’d) Simplified fund structure rather than having a number of fund structures Simplified fund structure rather than having a number of fund structures Enhance accountability to entities involves through a greater transparency with more disclosure of information Enhance accountability to entities involves through a greater transparency with more disclosure of information Accelerate trust and credentials attainment Accelerate trust and credentials attainment Gain more publications Attract more investees Gain more publications Attract more investees

Financial Services Would Like to Know The legal status of the entity The legal status of the entity The place in which the firm and/or its head office is located The place in which the firm and/or its head office is located The ownership of the firm and/or any relevant group structure The ownership of the firm and/or any relevant group structure The firm's resources The firm's resources Whether the firm is fit and proper (i.e. meets criteria as to honesty, competency and financial soundness) Whether the firm is fit and proper (i.e. meets criteria as to honesty, competency and financial soundness)

Things to Consider Costs Costs Fund manager cost and expense in fixed or variable percentage Lack of choice Lack of choice Investor will often have none of the rights connected with individual investments within the fund Lack of owner’s right Lack of owner’s right Investor could choose type of fund to invest in, but no control over the choice of individual holdings that make up the fund

Common Fund Challenges Keeping it lean Keeping it lean Communication should be strengthening Communication should be strengthening Agreed method and common view of risk management, due diligence, valuation, capital injection Agreed method and common view of risk management, due diligence, valuation, capital injection Dispute whenever happened and accommodated in the agreement Dispute whenever happened and accommodated in the agreement

Common Fund Challenges (cont’d) Regulatory compliance to minimized compliance risk (law and scheme) including ownership Regulatory compliance to minimized compliance risk (law and scheme) including ownership Complying with Financial Services Authority Complying with Financial Services Authority Compromising within any other interests Compromising within any other interests

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