Singapore Billionaire Bets Big on Energy in Africa, Asia
In September 2007, almost a year after New Zealand–born billionaire Richard Chandler founded investment firm Orient Global in Singapore, he made a rare appearance at a forum on social responsibility. Abandoning his penchant for privacy, Chandler outlined the link between giving and investing.
“We start to ask the question, where would the incremental dollar achieve the greatest return?” said Chandler. “Charity is good, performance philanthropy is better, and social investment is best.”
Chandler attended the global executive summit in Singapore again the following year -- and then dropped back out of public view, Bloomberg Markets magazine will report in its July/August issue. He doesn’t speak to the press. Current and former employees of his firm, now called Chandler Corp., don’t talk about him, citing nondisclosure agreements. Executives of most companies in which Chandler invests deal only with his staff.
“I never met him and I don’t know him,” says Indian billionaire Malvinder Singh, whose Fortis Healthcare Ltd. sold its entire stake in Vietnamese hospital company Hoan My Medical Corp. to Chandler Corp. for $80 million in August 2013, according to Fortis’s statement.
Behind the silence, Chandler, 55, is amassing a fortune that the Bloomberg Billionaires Index estimated at $3.7 billion on June 18. Energy-related companies account for at least $1.2 billion of his wealth.
Far-flung Locales
Chandler is betting on gas and oil in far-flung locales from Papua New Guinea to Kenya and Ethiopia, banking on demand from Asia’s growing middle class.
The firm invested in InterOil Corp., which has offices in Singapore and Port Moresby, Papua New Guinea. InterOil controls 35.5 percent of the exploration license that contains Papua New Guinea’s Elk and Antelope fields -- the island nation’s biggest undeveloped gas plays, according to InterOil. Chandler Corp.’s 19.6 percent InterOil stake was valued at $639 million on May 30.
Chandler Corp.’s investments in Southeast Asia extend beyond energy to consumer goods and financial services. The firm holds a $366 million stake in Vietnam’s Masan Group Corp. The company makes foods and beverages, offers banking services and mines tungsten and bismuth. In health care, Chandler Corp. owns a minority share of Medical City, a network of three hospitals and 23 outpatient clinics in the Philippines.
Chandler Corp. says its companies deliver health-care services to more than 2.5 million people in Vietnam and the Philippines each year.
‘Social Value’
“We look to invest in businesses that create social value and drive national prosperity,” Chandler Corp.’s website says.
Chandler is building on a fascination with emerging markets that began with Hong Kong in the 1980s and extended to Brazil, Russia and India. He remains famous for his campaign at SK Corp., South Korea’s largest oil refiner, says Seo Jae Hyeong, chief executive officer of Seoul-based Daishin Asset Management Co.
“People still have vivid memories of how an obscure fund waged a war against the SK chairman,” he says.
Chandler and his younger brother, Christopher, bought 14.99 percent of SK from March 26 to April 11, 2003. The shares had plunged 63 percent in five days earlier that March after SK reported it had misstated 2001 earnings at its trading arm by about $1.5 billion.
The Chandlers fought to oust Chairman Chey Tae Won, who’d been convicted of accounting fraud. Investors bought the shares over two years as the battle intensified, and SK boosted outside directors to 70 percent of the board from 50 percent.
By the time Chey defeated the Chandlers’ bid to remove him, in 2005, the stock had soared more than fivefold from the average 9,293 won per share the brothers paid. They walked away with more than $700 million in gains, calculations based on regulatory filings show.
‘Corporate Governance’
“The Chandler brothers contributed greatly to Korea by raising the awareness of corporate governance and provided an impetus for big companies to change,” Seo says.
Christopher Chandler, 54, now owns Dubai-based investment firm Legatum Group. Last year, his Legatum Foundation started the $100 million Freedom Fund with two partners to combat modern-day slavery. Christopher, like his brother, declined to comment for this story.
Sino-Forest
Richard Chandler stumbled in 2012. Chandler Corp. started buying Chinese timber company Sino-Forest Corp. after the company’s shares, which traded on the Toronto Stock Exchange, plunged 84 percent in two days.
Short seller Carson Block’s research firm said in a June 2, 2011, report that Sino-Forest was overstating the value of its assets. Hedge-fund firm Paulson & Co. sold its entire stake after the report and lost C$462 million ($426 million).
Chandler Corp. continued buying until the Ontario Securities Commission halted trading in August 2011. Chandler Corp. amassed a 19.5 percent stake as Sino-Forest’s biggest shareholder.
Sino-Forest filed for bankruptcy protection in March 2012, and the company has since been taken over by bondholders, according to Chandler Corp. David Walker, a forestry expert who’d been hired to lead a turnaround at Sino-Forest, was named Chandler Corp. CEO in January 2013. Chandler Corp. says Walker no longer works there because the firm isn’t involved with Sino-Forest.
Gas Fortune
One of Chandler Corp.’s current emerging-markets bets is liquefied natural gas. Last year, Asia accounted for 75 percent of global LNG demand of 236.9 million tons, according to the Paris-based International Group of LNG Importers.
Africa is growing as a gas supplier. More than 14 trillion cubic meters (500 trillion cubic feet) has been discovered in Angola, Ghana, Mozambique, Nigeria and Tanzania, according to Seah Moon Ming, CEO of Pavilion Energy Pte, the LNG unit of Temasek Holdings Pte, Singapore’s state-owned investment company.
“You can make a fortune in Africa if you can find oil and gas and if it’s economical to get it out of there,” says Jim Rogers, chairman of Singapore-based Rogers Holdings, who correctly predicted a commodities rally in 1999.
Asia’s deep-pocketed investors are expanding globally by acquiring LNG assets. Pavilion Energy said in November it had invested $1.3 billion in Tanzanian gas blocks. In May, Cheung Kong Group, owned by Li Ka-shing, Asia’s richest man, agreed to acquire Envestra Ltd., an Australian natural gas distributor, for A$2.4 billion ($2.2 billion).
‘Seismic Shift’
“LNG is the future,” says Chua Ma Yu, executive chairman of CMY Capital Markets Sdn. in Kuala Lumpur. “Throughout Asia, governments are building LNG terminals and gas pipelines as they respond to this seismic shift.”
Chandler is hunting for further riches in Africa’s petroleum reserves. Chandler Corp. holds a 9.9 percent stake, valued at $220 million, in Africa Oil Corp., a Canadian company that discovered Kenya’s first crude with a partner, Tullow Oil Plc, in 2012.
Africa Oil is a logical choice for bargain hunters such as Chandler, says Stuart Amor, London-based head of oil and gas research at RFC Ambrian Ltd., a natural resources adviser and broker.
Recent crude discoveries in Kenya may generate about $10 billion in revenue in three decades of production, London-based GlobalData said in May. In Nigeria, the continent’s biggest oil producer, Chandler Corp. owns 13.4 percent of Union Bank of Nigeria Plc. The lender has more than 350 branches that offer credit to a rising middle class.
“This should enable businesses and entrepreneurs to flourish, supporting and accelerating Nigeria’s economic growth,” Richard Chandler said in an Oct. 19, 2012, statement.
Geothermal Energy
Chandler Corp. is also pursuing geothermal energy through Orka Energy, which operates in China, Iceland and the Philippines; coal-bed methane gas in China via Hong Kong–based Green Dragon Gas Ltd.; and natural gas and power in Indonesia and the Philippines with Energy World Corp.
As Chandler cultivates his empire, he has funded artists and activists who aid the disadvantaged. In 2007, he formed Freedom to Create to encourage change in developing countries. In 2011, the foundation honored Sister Fa, a musician from Senegal who raises awareness about female genital mutilation.
“Mr. Chandler is an incredibly talented investor with a deeply embedded moral purpose,” says Priti Devi, who headed the foundation from 2010 to 2012. Devi says she didn’t find Chandler to be secretive. Instead, she says, “he has adopted what he believes is the most effective operating style for him.”
‘Your Investor’
Chandler isn’t shy about revealing his aspirations on his website.
“My passion is my art -- allocating capital to the world’s best investment opportunities,” he writes.
Newcastle University education policy professor James Tooley recalls Chandler’s commitment to scholarship. After the Financial Times published Tooley’s essay titled “Low-Cost Schools in Poor Nations Seek Investors” in September 2006, Tooley received a voice mail from Chandler.
“Professor Tooley, I’ve read your article,” it said. “I’m your investor.”
Tooley joined Chandler’s Orient Global investment firm in April 2007 as president of its $100 million Education Fund. The fund sought to combat global illiteracy by enhancing education for low-income communities in developing countries. Its Hyderabad, India–based Rumi Education collaborated with more than 100 schools. Chandler dismissed Tooley in 2009; Tooley declined to discuss the circumstances. Rumi Education has since been sold to its management team. Chandler’s education initiatives now involve philanthropic grants, according to Chandler Corp.
New Zealand
Chandler draws inspiration from his mother, Marija, employees who have worked at Chandler Corp. say. A native of Croatia, Marija met her New Zealander husband, Robert Chandler, in 1955. Robert and Marija founded New Zealand luxury department store Chandler House in 1972, according to Chandler Corp.รข€™s website.
As she scoured the world to stock the shelves, Marija instilled an appreciation for hard work, entrepreneurship and creativity in her boys: George, the oldest; Richard, the middle; and Christopher, the youngest. The couple sold Chandler House and gave the proceeds to their sons. The family moved to Monaco, where Richard and Christopher started Sovereign Global Investment in 1986. The brothers split amicably in December 2006. Christopher founded Legatum Capital in Dubai, and Richard set up Orient Global in Singapore.
Business, Art
Marija melded business with art. She began painting and adopted her mother’s name, Ana Tzarev. She also traveled. One YouTube video shows her visiting schoolchildren in Africa. In another, she talks about her billionaire sons at her father’s grave in Trogir, Croatia.
“They thank you for your philosophy on commerce,” she says to her father, “for they’re helping the world because of you.”
Chandler described his business approach to philanthropy at the Singapore forum.
“It’s very much a balance of science and art,” he said. “It’s a capital allocation process. It’s based on information. It’s based on common sense. Think strategic and, above all, sustainability.”
RFC Ambrian’s Amor, who has followed Chandler since the 1990s, offers this assessment of the billionaire investor’s current emerging-markets forays: “It would not be wise to bet against him now.”
To contact the reporters on this story: Yoolim Lee in Singapore at yoolim@bloomberg.net; Netty Ismail in Singapore at nismail3@bloomberg.net
To contact the editors responsible for this story: Michael Serrill at mserrill@bloomberg.net Gail Roche, Jonathan Neumann
Singapore Billionaire Bets Big on Energy in Africa, Asia - Businessweek
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