Adding a very capable key management team member creates tremendous value to the firm
Author: Truong Dieu Le, Partner, Mekong Capital
Mar 21, 2018
Before Chad joined, the Mekong team was having real difficulties due to delayed fund raising and not yet having completed many successful exits. Cash reserves were running out and every expense was cut to the bare minimum. Even salaries were partially deferred. Some team members even sacrificed to work less time, so salaries could be minimized. A few people left the company due to the uncertainty. The company was at the edge of scaling down…
Chad Ovel was the CEO of AA Corporation, a furniture company and an investee company of our first fund. We witnessed Chad turn around the company during his 6 years there. Under Chad’s leadership, AA Corporation had several major breakthroughs including: revenue CAGR of 51%, EBITDA CAGR 60%, and a 12x increase in average annual revenue per employee. We believed he could have a similar impact at Mekong Capital.
It was the first time in Mekong’s history that we had recruited a person to come in at a top level leadership role of Partner, the same level as the founder, Chris Freund. Before this Chris had always been the only top figure, the only leader, the only boss. It was a big step.
Under Chad’s leadership, he completed the divestment of Golden Gate, a difficult case, at a 9x return for Mekong Enterprise Fund II. In addition, with Chad together with Chris as the senior investment leadership, we successfully raised Mekong Enterprise Fund III in 2015. In 2017, he led the divestment of Traphaco, which generated a return of 6x for Vietnam Azalea Fund.
Mekong Capital has consistently won private equity industry awards 5 years in a row, since the year that Chad joined. We already achieved our Vision 2015, and we have just generated our new Vision 2025.
This is a great example that shows adding a very capable key management team member can create tremendous value to the firm. And having a strong management team is critical to achieving a company’s vision.
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Mekong Capital makes investments in consumer-driven businesses and adds substantial value to those companies based on its proven framework called Vision Driven Investing. Our investee companies are typically among the fastest-growing companies in Vietnam’s consumer sectors.
In January 2022, Mekong Capital founder Chris Freund published Crab Hotpot, a story about a bunch of crabs who found themselves stuck in a boiling pot. The colorful cover of “Crab Hot Pot,” complete with expressive cartoon crustaceans, looks like a children’s tale at first glance. But as one continues reading, it becomes clear that the work has an important message about organizational transformation, leadership and focusing on a clear vision for the future.