Kevin Pak

Legal Counsel

As legal counsel for SSG, Mr. Pak is responsible for legal risk management and works closely with the rest of the team in constructing efficient cross border investment structures and transaction execution.

Mr. Pak has over ten years of experience in special situations and distressed transactions.

Mr. Pak joined Lehman Brothers Asia Special Situations Group as Senior Legal Counsel in 2004 and was responsible for Asia regional coverage until the Lehman Brothers bankruptcy in 2008. While with Lehman Brothers, Mr. Pak was a member of the Asia Transaction Approval Committee and the Asia High Yield Credit Committee and managed the legal elements of numerous special situation investments throughout Asia, with a strong focus on China, Southeast Asia and Korea. After the Lehman Brothers bankruptcy and prior to joining SSG, Mr. Pak worked as a consultant to the liquidators of the Lehman Brothers estate. Prior to Lehman, Mr. Pak was the senior foreign legal counsel at Yulchon for distressed debt transactions.

Mr. Pak is a member of the New Jersey Bar Association and holds a Bachelors degree in philosophy from New York University and a Juris Doctorate from Washington and Lee School of Law.

Peter Cairns

Kevin Pak

Bowie Pang

Vishal Bhargava

Director – India

Vishal Bhargava is a Director of SSG India, primarily responsible for making special situation investments in India.

He has over four years of experience in direct investments in India.

Mr Bhargava. previously worked at Doric Capital, an Asia –ex Japan long short equity fund where he focussed primarily on the Indian markets. He started his career with Flextrade, an algorithmic trading platform provider based out of New York, creating portfolio trading strategies. He moved back to India to become an entrepreneur and co-founded iMediaBlitz, an Internet search marketing firm targeted at the US markets. He led iMediaBlitz to become one of the top Amazon associates. He then moved to Veddis Ventures where he was responsible for investments in start-ups and advising portfolio companies across Europe and India.

Mr. Bhargava obtained an MBA with Distinction from INSEAD, as the Garfield Weston scholar. He has a Bachelor’s degree in Electrical Engineering from IIT Bombay, and an MS in Computer Networking from North Carolina State University.

Antares Au

Dinesh Goel

Tobias Damek

Vishal Bhargava

Rocky Kwok

SSG Wins AsianInvestor 2011 Investment Performance Award

Press Release – 27 April 2011

Click here to download pdf.

SSG Capital Management is pleased to announce that its maiden fund, SSG Capital Partners I, LP, has won the AsianInvestor 2011 Investment Performance Award in the category of Distressed/Special Situations Hedge Funds. The publication announced the winners of the prestigious awards on 27 April 2011. The winners were determined on the basis of performance data, as well as market feedback. SSG Capital Partners I, LP was launched in late 2009 and held its final close in 2010. The fund invests in special situations and distressed debt in Asia Pacific ex-Japan.

Managing Partner and CIO, Edwin Wong, commented: “We are honoured to receive this award recognizing our efforts and investment performance to date, and we want to thank our investors and investee companies for making this possible. This award is particularly meaningful to us and is an endorsement of the fact that our strategy is working and that our hard work is bearing fruit.” The fund has made over ten investments since inception and has completely or partially exited a number of investments resulting in cash distributions to investors. “We continue to build on our success and actively pursue further investments across the region this year. In addition, we are keenly focused on managing our existing portfolio and building out our infrastructure in parallel with the growth of the fund.”

The AsianInvestor 2011 Investment Performance Award will be given out at the awards dinner on 19 May 2011 at the Conrad Hotel, Hong Kong. For the more information on the awards please visit AsianInvestor .

About SSG Capital Management (Hong Kong) Limited
SSG Capital Management is an alternative investment firm focusing on Special Situations investing in Asia Pacific ex-Japan. The firm was founded in 2009 by former members of the Lehman Brothers Asia Special Situations Group. SSG currently has assets-under-management of more than $300 million and is actively investing its flagship fund, SSG Capital Partners I, L.P. SSG has a fundamental-driven value investing approach to special situations. The typical investment horizon is two to four years and the fund primarily focuses on China, India and Indonesia. In these markets the team members have a long history of making direct investments and have accumulated significant local market knowledge and relationships. SSG Capital Management (Hong Kong) Limited is regulated by the Hong Kong SFC.

For further information on the firm, please contact Peter Cairns at +852 3909-8888 or visit our website at www.ssgcapasia.com .
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Edwin Wong * CIO * SSG Capital Management

Asian Investor – 8 December 2010

Click here to download pdf.

Edwin Wong is managing partner and CIO of SSG Capital Management, which he co-founded as a spin off from an Asia-Pacific distressed and special-situations desk at Lehman Brothers. The core members of that team came together in 2009 and launched its first fund, SSG Capital Partners I.

What’s the fund’s size, and who are the investors?
Assets under management are about $250 million, and we’re in the process of doing another close. The fund was seeded by Asian families we have done business with in the last decade, and for whom we’ve made money in the past. Many of them have never invested in funds before, but they know our returns and knew their capital wasn’t at great risk. They also see SSG as a strategic platform to help grow their enterprise, as they are keen to co-invest alongside the fund. If you think back to early 2009, the institutional fund-raising environment was very distressed, especially for funds like ours with a five-year structure. So we went to people who were comfortable with us and knew about our style of investing. We also went on the road to Europe and got a bit of money from family offices there.

What are your return targets?
We wanted to be conservative and have guided investors to a target return of 25%-plus. Looking at the investments we have made to date, we should exceed that meaningfully. The fund is currently up 21% but that is based on very conservative marks. We typically keep the assets marked at cost until a liquidity event takes place. The mark-up is coming from our first asset resolution, where we are getting all our capital back, plus a cash profit, plus a chunk of free equity. Our investors will be getting their first cash distribution based on this.

What are your fees?
It’s a 2-and-20 structure. The way the performance fee works is that investors get all their capital back plus an 8% hurdle rate before they are charged performance fee. It’s a very honest structure, where there is no chance of us taking our carry until investors get all their money back plus an 8% return. The way our cash on cash works, we expect investors will get all their capital returned sometime between years two and three.

How many positions will you be working on at any time?
I expect the portfolio to have no more than a dozen meaningful positions. It is a labour-intensive process. We don’t do trades over a broker screen. Most of our positions are 100% proprietary, meaning we source and create them from day one and are the only investor in the transaction. We’ve been operating below the radar screen, and I have found that to be a good niche. We have strong local networks for sourcing deals, especially in our core geographies of China, India and Indonesia.

How do you handle investments in countries like Indonesia where entrepreneurs may prioritise their own interest over yours?
It boils down to doing things you know well and staying away from things you don’t know. We have learned from experience who to deal with and who not to, which structures work and which don’t. Legal documentation only goes so far. We only get involved in transactions where we are not only structurally protected, but the principals behind them are people we have a lot of comfort with. Structurally, our deals can be quite complex and we take all kinds of collateral, in some cases we have even taken cash. We do everything we can to align our interests with key stakeholders.

How do you ensure good corporate governance is being practised in these companies?
We act as an agent for change in these enterprises, and we are activist in that sense. We were brought up with the high US standards of Lehman Brothers and those standards remain at SSG. We have a board seat in most of our investments, but we are actively involved with management whether we have a board seat or not.

How are the markets in general creating opportunities for you?
We live in a strange world right now. There is a ton of liquidity in the markets, but they are heavily skewed towards liquid assets, so anything from high-grade bonds to high-yield bonds to equities are up significantly. On the other hand, illiquid assets offer value, but most people are reluctant to invest in them or forbidden from doing so. Plus many mid-cap companies are still starved of capital, as banks aren’t really lending to them. This is a great time to invest if you have long-term locked-up money.

Are distressed investors looking more to America and Europe currently?
Those regions are in more distress than Asia, and the game is different there, with much bigger portfolios – it is more of a legalistic servicing type game. We did something similar during the late 1990s, when the crisis was much more severe and systemic. Now in Asia, we focus much more on single special situations opportunities, and that requires different skill sets from those needed to service, say, a mortgage-backed portfolio. There are still plenty of defaults out there caused by, say, leverage, disputes between shareholders or problems with derivatives.

Are there any sectors or countries where you’re finding especially good trades at present?
We’re quite opportunistic in nature. Greater China, Indonesia and India are our key geographies. In terms of sectors, we’re looking at opportunities in resources, shipping, real estate and retail. When we say distressed investing, it’s more about acquiring an asset at a deep discount to its true value than buying into troubled assets. In fact, all of the companies we’ve invested in are producing positive Ebitda.

How do you risk-manage the fund?
First of all, we spend a lot of time conducting due diligence on an opportunity before we decide to commit capital. Our LPs are very successful businessmen in a wide range of sectors, and we often draw on this deep pool of resources to ensure we cover all the financial, operational and political angles. We have specific concentrations limits by country and sector. We have a maximum concentration limit of 25%, but in practice we would like to keep it to 15%. We will also consider hedging if the circumstances warrant it.

What are you hearing from your investors?
We met with a lot of our first-round investors recently, and they are pleased to see us delivering on what we said a year ago. Also, they can now see very clearly the types of investments we have made and how we achieve significant returns without putting their capital at great risk. Many of them have decided to increase their commitment to the fund, which is a strong vote of confidence. They have also been helpful by introducing us to new investors. They like our very hands-on approach and that we are delivering 100% alpha. We’re not doing any carry trades. It’s a lot of hard work to do what we do, but the returns make it all worthwhile.

Edwin Wong and the Zen of special situations

Asian Investor – 6 September 2010

What makes a situation special? Edwin Wong of SSG Capital Management provides enlightenment on that and talks about his activities since leaving Nomura.

First, the back-story. It is September 15, 2008, the Monday morning after Lehman Brothers goes bankrupt. The bank’s Hong Kong offices are practically empty, the staff enjoying a well-earned (or undeserved) lie-in. But the desks of the special-situations team remain occupied. That team is run by Edwin Wong, who has risen swiftly through the Lehman ranks from vice-president in the late 1990s up to senior managing director, running the special-situations unit, which manages $2 billion, as well as being in charge of flow business. They all come into work unpaid, because they know their projects haven’t disappeared and, if neglected, might lose some of their special sheen, even if Lehman is now buried at a crossroads with a silver stake through its heart.
This continues for a few weeks until the ‘Jesse Bhattal trade’ is done, with the former Asia-Pacific CEO moving all the Lehman staff in the region to Nomura (including, literally, the tea lady). So, the SS boys’ work had to stop. Nomura only got the people, not the special situations. The deals went to the liquidator. Nomura didn’t want to do these kinds of trades, preferring to conduct a flow business, and the Japanese bank could not offer the kind of balance-sheet width that Lehman had. In due course, Wong’s team left Nomura in its entirety and last year set up Hong Kong-based SSG Capital Management, an acronym for Special Situations Group, their former corporate name. All the founders got some shares and, in keeping with their game spirit, nobody got paid for the first few months.

They have raised $250 million in a fund and a segregated managed account from a wealthy family to invest in special situations. There is no seeder money, as the team wanted to retain the equity. The fund targets annual returns of 25%-plus. It has a five-year lockup, though expects to return money to investors by year three. There is a 2% management/20% performance fee structure. No performance fee is payable until capital plus an 8% return is repaid.
SSG hopes to raise another $100 million before closing the fund at the end of the year. However, new investors entering now may have to pay more for their shares, because the underlying situations have been marked up since launch. Not necessarily the Lehman-owned situations that this team once managed, though. If they want to retrieve those positions, they’ll need to speak to the Lehman liquidators.

So what is SSG trying to accomplish, and what’s the special touch? “We look for situations where we can drive the restructuring,” says Wong, chief investment officer and managing partner. “And before we invest, we have figured out exactly how we’re going to drive it. At the point of investment, what we plan to do has been discussed with – and is likely to be fully endorsed by – the stakeholder. Special situations are not really a mysterious black box.”
Roughly half the portfolio comprises deals in default, and the rest are special situations. That means no default is involved, but shareholders might be at loggerheads and want to split up, or a lender may wish to get out. Entry for SSG is mostly via the debt side, but with equity upside and usually collateralised.
Specialising in natural resources, shipping and retail, the firm is largely self-originating deals and finding private deals in China, India and Indonesia. They sometimes use local partners, but for the most part, find deals through their own list of contacts, such as tycoons. They are not particularly active users of steers from the Wall Street bank desks, and SSG remains a very Asian operation throughout.

“We’re in synch with the deal flows and businessmen,” says Wong. “Many LPs can give us a strategic edge. We can’t use their name to market ourselves, but some will talk to investors carrying out due diligence. “In Asia, we might not have the deeper pool of distress that the US has, nor their established systems for resolution, like Chapter 11 procedures,” he adds. “But funds that can play the game right can make a fortune here.”

Apart from missing the first-class air travel, Wong and his team are happy to have their own firm. When they left Wall Street, they were in demand, and the question of whether they would ever go back to the big show is a scenario they’ve been presented with and had to decide on. However, they’re going solo, and thinking about getting value for their equity in the next few years by putting out more SSG offerings, including local-currency funds in selected Asian countries.

SSG – Disclaimer

The information contained on this website is provided for informational purposes only and may not be relied on as an offer to sell or a solicitation of an offer to buy an interest in any entity managed by SSG Capital, and may not be reproduced or redistributed without SSG Capital’s prior written consent. The information in this website is not intended and should not be construed as investment, tax, legal, financial or other advice. All information provided on this website is provided on an “as is” basis without warranty of any kind. SSG Capital, its affiliates, directors, officers, agents and funds managed or advised by it (together, “SSG Capital”) expressly disclaim all warranties and conditions with regard to the information on this website. SSG Capital has not audited, reviewed or otherwise verified such information and accordingly makes no representation or warranty (express or implied) in respect of the accuracy, completeness, fairness of otherwise of such information. The information in this website is general information only. This website should not be considered as a comprehensive statement on any matter and should not be relied on as such. SSG Capital has not undertaken, and nothing in this website shall be taken to constitute, any forecast or analysis of future results. Consequently, there is no assurance that there will not be any future variation between the information provided in this website and future performance. Past performance is not a guarantee of future performance. Nothing in this website shall give rise to a fiduciary duty, advisory or other relationship between you and SSG Capital and SSG Capital accepts no responsibility in any way including by reason of negligence for errors or omissions contained in this website. SSG Capital has no obligation to update any information in this website and specifically disclaims any warranty as to the currency of any information contained herein.

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Bowie Pang

Operations Assistant

Bowie Pang joined SSG in 2009 and is responsible for supporting the COO, across operations, risk management and compliance functions.

Ms. Pang received a BSc (Hons) in Economics with Accounting from Loughborough University.

Peter Cairns

Kevin Pak

Bowie Pang

Rocky Kwok

Analyst

Rocky Kwok joined SSG in 2009 as Analyst and is responsible for supporting the investment team in research and due diligence effort.

Mr. Kwok received a Bachelor’s degree in Management (Marketing) from Peking University.

Antares Au

Dinesh Goel

Tobias Damek

Vishal Bhargava

Rocky Kwok

Tobias Damek

Director

Tobias Damek is a Director of SSG primarily responsible for identifying, assessing and executing special situations investments in South East Asia and Australia.

He has extensive experience investing in distressed and other special situations in Asia.

Mr. Damek previously worked at the Lehman Brothers Asia special situations Group where he performed several special situations investments, particularly in the distressed space. Previously, Mr. Damek was a consultant with Bain & Company in Singapore and in the UK. He advised clients across a number of industries and geographies on strategic issues, including business turnaround, cost reduction, market entry and acquisitions. His other professional experience includes working for Morgan Stanley, Oliver Wyman & Company, as well as being an entrepreneur.

Mr. Damek obtained an MBA from INSEAD, France, in 2005 and an MSci in Physics from Cambridge University in 2000.

Antares Au

Dinesh Goel

Tobias Damek

Vishal Bhargava

Rocky Kwok

Dinesh Goel

Executive Director

Dinesh Goel is an Executive Director of SSG primarily responsible for identifying, assessing and executing special situations investments in India.

He has over eight years of experience in researching, investing in and trading in Asia credit.

Mr. Goel previously worked at the Lehman Brothers Asia special situations Group and was mainly responsible for private and public convertible bond investments of the group. He has deep experience in the structuring of private convertibles, having led most of the private CB investments for the group, and analyzed most of such deals originating from India. He started his career with Lehman Brothers in Tokyo in 2002. Having initially worked with Portfolio Strategy Group, Mr. Goel then moved to Credit Research, where he worked as a desk analyst for principal positions related to stressed and distressed convertible bonds.

Mr. Goel has a Bachelor’s degree in Chemical Engineering from IIT Delhi and an MBA from IIM Ahmedabad. He is also a CFA charterholder.

Antares Au

Dinesh Goel

Tobias Damek

Vishal Bhargava

Rocky Kwok