Weijian Shan on Leverage and Turnarounds in Asia

12/09/20 • 46 min

In this episode, I speak with Weijian Shan, the chairman and CEO of PAG — a leading Asia-focused alternative investments firm with ~ $40 billion of assets under management.

Prior to PAG, Shan was a co-managing partner of TPG Asia (formerly known as Newbridge Capital).

It was a real honor to have Shan on the podcast, as his life story is remarkable.

If you haven’t read his memoir Out of the Gobi yet, I heartily encourage you to do so. It’s an extraordinary book that recounts Shan’s experiences during the Cultural Revolution — particularly the six years he spent doing hard labor in a re-education camp — and the transformative impact that the normalization of U.S.-China relations and Deng Xiaoping’s economic reforms had on China generally, and on Shan in particular.

And he’s just written a new book called Money Games, which details the rescue of one of Korea’s largest banks on the heels of the Asian Financial Crisis.

I reached out to Shan after finishing Money Games because — in addition to providing one of the few narratives to detail a private equity transaction from sourcing through exit — I think his book offers tremendous insights into the art of private equity deal-making, and I wanted to explore some of the themes it raises.

In addition to his books, Shan and I discuss the importance of stakeholder analysis when structuring private equity investments; whether there is a problem of too much debt in the Chinese economy; SOE reform, and the prospects for China’s economic rebalancing toward domestic consumption; the institutionalization of private equity in Asia; and, his advice for younger people who wish to pursue a career in private equity, among other topics.

Shan’s thoughtful comments prompted me to rethink some of my own analyses and assumptions. I really enjoyed this conversation, and I hope you will, too.

This podcast was recorded in December 2020.

In this episode, I speak with Weijian Shan, the chairman and CEO of PAG — a leading Asia-focused alternative investments firm with ~ $40 billion of assets under management.

Prior to PAG, Shan was a co-managing partner of TPG Asia (formerly known as Newbridge Capital).

It was a real honor to have Shan on the podcast, as his life story is remarkable.

And he’s just written a new book called Money Games, which details the rescue of one of Korea’s largest banks on the heels of the Asian Financial Crisis.

Shan’s thoughtful comments prompted me to rethink some of my own analyses and assumptions. I really enjoyed this conversation, and I hope you will, too.

This podcast was recorded in December 2020.

Previous Episode

Tom Burgis on The Rise of Kleptocracy

In today’s episode I speak with Tom Burgis, an investigations correspondent with the Financial Times, and author of two courageous books: The Looting Machine: Warlords, Tycoons, Smugglers and the Systematic Theft of Africa’s Wealth and the recently released Kleptopia: How Dirty Money is Conquering the World.

I strongly encourage you to buy copies of Tom’s books, read them, and share them with others.

Why?

Because as you’ll hear in this podcast, the themes his books cover constitute an existential threat to democratic institutions and governance — and the rule of law — globally.

They’re absolutely riveting yarns, full of intrigue and consequences.

And my hope is that if more people read Tom’s work, then we’ll stand a better chance of resisting the precipitous slide into kleptocracy that endangers us all.

Courage is contagious.

My discussion with Tom covers:

The dots connecting The Looting Machine and Kleptopia.
The story of Mukhtar Ablyazov — a Kazakh billionaire whom some say is a freedom fighter, some say is a fraudster, and some say maybe he’s both.
The complicity of U.S. and UK professional services firms in facilitating the activities and laundering the funds and reputations of kleptocrats.
Some mistaken assumptions behind the ‘convergence’ thesis.
How citizens can keep Kleptopia in check and revivify democracy.
John Kenneth Galbraith’s notion of ‘the bezzle’ and where ‘the bezzle’ is biggest now.
And, what the rise of Substack and the proliferation of journalists going solo or direct-to-consumer imports for the future of investigative journalism.

I’m fired up about this episode, and I hope you will be, too.

If you enjoy the Portico Podcast, please share it with friends, colleagues, and / or your connections on social media. Thanks!

This podcast was recorded in November 2020.

Next Episode

Jake Cusack on Investing in Frontier & Fragile Markets

In this episode of the Portico Podcast I speak with Jake Cusack, co-founder and Managing Partner of The CrossBoundary Group, a firm that unlocks private capital for sustainable growth and strong returns in underserved markets.

I first reached out to Jake about 10 years ago after he and one of his co-founders published a study on entrepreneurship and private sector development in Afghanistan.

That initial contact kicked off a series of conversations on how to harness markets and mobilize private capital in order to build businesses in frontier and fragile markets, which is the overarching topic of this episode.

In today’s conversation, Jake and I discuss:

His journey from the Marine Corps to co-founding CrossBoundary with a couple classmates from Harvard;
Why investment is a better tool for development than the provision of grants;
The critical role that investment facilitation plays in creating investable pipeline;
The rationale for CrossBoundary’s expansion from an advisory firm to a group that also manages investments
The suitability of the traditional private equity model in frontier markets;
Recruitment and how to inculcate a shared culture across a globally dispersed footprint;
CrossBoundary’s recent initiative to open source its approach to project financing mini-grids;
And much, much more.

There are loads of links below that will take you to the articles, books, and reports discussed in the episode, as well as other resources of interest.

These include CrossBoundary’s research studies with IFC on private equity in fragile and conflict-affected situations in Sub-Saharan Africa, their recent report on scaling up investment in Africa in the Covid-19 era with the Tony Blair Institute for Global Change, and many others.

If you’re interested in their open-source initiative for mini-grids, the team will be sharing term sheets for the project finance contracts, as well as a template model, on 15 February — so take a look and take action if this is in your area of interest.

This is a great companion to my interview with Roger Leeds in Episode 2 on Private Equity & Development. So, if you missed that interview, I invite you to visit the archive and give it a listen.

And if you’re feeling motivated after listening to Jake, then navigate to crossboundary.com/careers to peruse their job openings.

I hope you enjoy the conversation.

This podcast was recorded in January 2021.

CrossBoundary resources referenced in this episode include: