< ?xml:namespace prefix = o />By Joanna Phermchai-Nielsen
Moving up the elevator to the 28th floor of < ?xml:namespace prefix = st1 />Pacific Tower just before meeting with Thomas Gullacksen at his different kind of office at the Pacific City Club viewing the entire city, you are trying to imagine what Siam Equity Partners is really doing?
“It is actually pretty simple,” Thomas Gullacksen says, and continue.
”Basically, you have some companies who need growth capital as well as strategic management assistance and investors who want to put their money into work. And then you have me finding companies with a potential, facilitating their development and making the connection to investors” he explains.
Thomas Gullacksen has established the first and only pure Thai private equity fund and he specializes in capital injections into medium-sized companies in Thailand, which are in need of a new ownership structure, or are undergoing a generational change in leadership. Siam Equity Partners was first presented in July 2008, but the idea of establishing an equity fund has been under construction for almost six months.
Thomas Gullacksen was previously employed as country manager and managing director for the Maersk Group of 6 companies in Thailand until a day in January 2008 where his life turned up side down. His position as part of the new organization of the Mærsk-group was abolished. This came as a shock for Thomas Gullacksen.
He was however offered a new and better position within Mærsk at the headquarter at Langelinie in Copenhagen, but he and his family had just settled down in Thailand.
As the Dane says, “it was not the time for us to go back to Denmark”. But what do you do in Bangkok with your family and no job? Siam Equity Partners was the solution to that problem.
Working with an equity fund is not new for Thomas Gullacksen. He was previously employed with the private equity fund Axcel in Denmark, and from his experience there, he believes that there is a large prospective for medium-sized Thai company.
As Thomas Gullacksen explains “the potential value in Thailand is not being realized. A significant amount of medium-sized Thai companies have in general not grown and expanded abroad in proportion with the potential of their products and services”. He continues “not realizing potential value is a problem for business and their investors, but certainly also for Thai society at large as job creation and tax contribution is not maximized”.
“The Thai market for private equity investments is very attractive and underserved” Thomas Gullacksen says and explains that large international and regional private equity fund are not that interested in Thailand because, from their point of view, the market is too small and uncertain.
“Only approximately 20 private equity transactions have been carried out over the last 8-10 years”, Thomas Gullacksen continues. But Thomas Gullacksen believes that there must be a market and growth opportunities present in Thailand. The only question is if Thailand is ready for a private equity fund as Siam Equity Partners.
There is no doubt in Thomas Gullacksen’s mind that Thailand is increasingly becoming ready and he sees the situation in Thailand now as it was in Denmark 10 years ago. Business owners are not yet comfortable with what they can expect from an equity fund. But Thomas Gullacksen still believes that he can convince Thai business owners that this is a solid solution to developing companies further and help them realize their full potential.
As a foreigner in a land with a different culture it can be hard to convince the Thai people that they should let a farang go into business with them.
“In a country as Thailand it can take a very long time to gain the confidence business connections are based on” Thomas Gullacksen states.
“But when you work in a different culture you have to adapt to the common way of doing things” he continues. Thomas Gullacksen speaks Thai and this is a big bonus when doing business with Thai people.
The knowledge of the Thai language and especially the Thai culture is an important factor for Thomas today when he is constantly in contact with potential business opportunities.
“The business community in Thailand is relatively closed. A limited amount of people possess a lot of money. Corruption is a problem, which is why trust is hard to gain especially to a farang,” he adds. But being a farang is positive in the way that a farang does not work in the same cultural hierarchy as Thai people do. And that is why it is sometimes easier to make the changes it requires to the companies.
Thomas truly believes that Thailand needs a local and focused private equity fund, and he will keep trying to convince Thai business owners of that. But how long it will take Thomas does not know. He can and will not wait forever if Thailand still is not going to be ready.