Patamar Capital’s Tang: “Impact investing may not feel as good as philanthropy”

In this conversation, Tang shared the differences between Patamar I and II in Patamar Capital, which is a venture capital firm that has a portfolio of 20 companies located across South Asia and Southeast Asia. The firm started with Patamar Fund I or the “Livelihood Impact Fund” in 2014 and raised $45 million. The fund also invested in technology-enabled companies and platforms that serve the low- and middle-income consumers in developing Asia. Patamar II funds are currently being raised for investments in startup companies in India, Indonesia, the Philippines, and Vietnam.

She also discussed Beacon Fund, an investment firm that works for women and was launched late last year with an initial target of $50 million. It aims to invest in businesses led by female entrepreneurs based in Southeast Asia, particularly Vietnam, the Philippines, and Indonesia.

The following key points were discussed:

• The venture capital market in Southeast Asia has evolved with new business models being created.
• Patamar Capital invests in tech-enabled companies serving the mass market that solves real pain points in countries based in South Asia and South East Asia.
• Patamar Capital focused on its current portfolio of startups during the pandemic.
• The impact investment industry still faces challenges in measuring its data.
• Asian family offices and investors are less enthusiastic about impact-based investment.
• Impact investing firms can achieve great returns.
• Companies catering to the mass market were more resilient and robust during COVID-19.
• In Beacon Fund, the company looks deeply into gender lens investing, which promotes businesses women-led business and inclusivity in the workplace.
• There has been an explosion of opportunities for sectors like healthcare, education, and technology.

On the Beacon Fund side, we launched that fund in the third quarter last year and we've seen a lot of interest in gender lens investing. It's perhaps perceived as quite a new thing in Asia, the underlying thesis has been around for much longer. There's been a lot of interest in gender equality, women's economic empowerment, and how that will be a powerful tool. It’s really making a change over the next decade. We've seen a lot of strong resonance there for that particular thesis as well.

The following is the transcript of the interview:

Foo Boon Ping (FBP): Good morning and welcome to Wealth and Society. This morning, we have the pleasure of speaking to Shuyin Tang, partner at the venture capital firm Patamar Capital. Shuyin is also the chief executive officer (CEO) and co-founder of one of its investment funds that is targeted at social enterprises and financial inclusion for women, the Beacon Fund. Patamar Capital started in 2011, a fairly young venture capital, a company that is focused on South Asia and Southeast Asia. It has more than $100 million in assets under management. It started with its first fund, Livelihood Impact fund, which later became Patamar I Fund. Since then, it's also started Patamar Fund II and Beacon Fund, which is catered more for gender lens investing. Shuyin herself comes from varied backgrounds, spanning different areas in consulting, and also a big part of it is in development, finance and, impact investment. She was formerly in a company covering consulting and after that, with Patamar Capital for impact investment, as well as LGT Venture Philanthropy. In Asia, as part of her portfolio, she covers over 20 companies and the funds are mainly invested in tech-enabled distribution platform and financial services.

A pleasure to have you with us Shuyin and we'd like to hear from you a landscape of impact investment in the markets that you cover. Update us with what's been happening with Patamar Capital, in addition to what I've just shared earlier, and also in terms of your experience in getting into this space, which is obviously not new to you. You have a history of doing this and why the seven markets that you've identified?

Evolving investment landscape

Shuyin Tang (ST): It's a pleasure to be here and thanks for having me. I first came to Vietnam more than eight years ago. At that time, it was a very different landscape not just for impact investing but also for venture capital (VC), private equity, and more. In Vietnam at that time, there were barely any VC or private equity firms which were active. You could count them all on one hand. Eight, nine years later, there's really been an explosion in early-stage investment activity more broadly. Impact investing has grown up alongside huge interest in VC models in Southeast Asia.  It's been very interesting to see that real kind of step change in both the venture capital market and the underlying kind of companies, company formation, entrepreneurship, and the new business models being created.  

In Patamar, we've been investing since 2011. Originally, we were a San Francisco-based firm but now we're headquartered in Singapore because we see that it makes much more sense to be closer to Asia and close to home, and our investments in terms of what we do. Yes, we've made over 20 investments. I'm responsible for part of that portfolio, not the entire 20, in a variety of sectors. It could be in healthcare, education, financial services, financial inclusion. The common thread, as you have seen and realised is that we're really interested in serving the mass market. Not the kind of elites living in cities. But how do we actually reach scale through people outside of the major cities and urban areas and low-income populations?

FBP: And to a mass market and obviously, Asia is a great growth story, a kind of emerging middle class as well. Your mission is also to bring the mass market, the low-income group to this middle-income status, leveraging on the growth that the region has been experiencing. In terms of the company that you invest in, tell us about your investors, also your source of funding, mainly from family offices as well as institutions based in Asia. There is a big element of impact investing for social good for the mass market, bringing them to the middle income, and also investing in social enterprises and financial inclusion. Tell us first in terms of the startups that you identify and invest in.

The startup technology investment space in Asia, particularly Southeast Asia, South Asia, are getting very competitive. There are similar venture funds that look at startups in the region and how has it evolved over the years, especially more recently, with the challenges of COVID-19? But start with the kind of companies that you invest in.

Startups as problem solvers

ST:  To give you an example of what a tech-enabled company serving the mass market looks like is a company called mClinica, which is the largest virtual pharmacy that works in ASEAN. It connects almost 200,000 pharmacy professionals from 40,000 pharmacies and provides health care to hundreds of millions of consumers through this network. That’s not the typical big chains of CVS or Watsons or what consumers in more developed markets might be familiar with. Healthcare often is delivered through these pharmacies, which independently run quite fragmented and don't have good access to information or the best pricing. By really empowering these pharmacies to become the centre of care for the communities and bringing them into a common mobile platform, mClinica helps patients access more affordable medicines. It also leads to improved patient adherence and helps these small pharmacies improve customer loyalty and increase their sales to be better able to track the customer purchases. The other really interesting piece here is data. The company is able to gather last mile data from these pharmacies at an unprecedented scale, which has not been possible before and it generates a lot of insights not just for the pharmaceutical industry, but also for non-government organisations (NGOs), governments, health ministries, and so forth who have this information for the first time. They can then begin to think about issues such as counterfeiting, the supply chain, and how to better manage it. It's a very exciting example of technology, but really applied in a way which solves a very real pain point in the healthcare systems in these countries.

FBP: What are the criteria that you use when evaluating a startup? That they are tech-enabled, they serve the masses, low-income group, low to middle income group? And there’s an element of impact investing as well? How do you evaluate? On your website, you mentioned that five million people have benefited from some of the investments. And how important is that element of having no tangible, measurable impact on the society that this startup serves?

ST:  As an impact investing firm, a core part of our thesis, apart from delivering financial returns is to actually deliver on supporting lower middle-income communities as well as small and medium-sized enterprises (SMEs) in these regions. It's also why our limited partners have invested in the fund. It's a very important part of our responsibility. As for how we assess the companies and the kind of due diligence process, in some ways, it would be very familiar to a typical due diligence process of a venture capital firm. We still have a lot of financial discipline, the same kinds of analyses around the founding team in the market and the competitive landscape as most VC firms would. The additional part for us is really looking at how is impact a part of this company's business model and what is the theory of change here? We're really looking for companies where impact is inherently part of what the company does. The company that I just described aggregating small pharmacies space, that's what the business does. It's not a side project or something which we fund through some other operation. That is the core business of the company. For most of our companies at Patamar, that's what we like to see. So as the core business scales, the impact also scales through that same growth process. And in terms of measuring and evaluating the impact, we look for the numbers because everyone likes to see the numbers in terms of the number of people impacted. But apart from that breadth of impact, we also find it very important to understand the depth of impact. It's very important to understand what is the change that's actually occurring and be able to quantify that as well. And more interesting things like what were some of the unintended consequences? What are some of the risks of really achieving that impact? Also, what was our contribution to having that impact? This concept of additionality is a very interesting topic and is widely discussed in impact investing cycles as well.

FBP: You mentioned data in terms of company that you invested in technology and access to data, also access to the last mile to the consumers themselves. When it comes to impact investment from your investors, looking at data or measurements, that's been a challenge in terms of measurement, in terms of which matrix to use, and there are several global impact investment standards and framework, right? Like the global impact investment rating systems, social return on investment, Global Impact Investing Network (GIINs), impact ventures (IV) supplies. Do you adopt any one of these or do you need to customise it because of the market that you operate in? Trying to get those data measured by the way that the framework requires may not be feasible or practicable?

Impact investment performance

ST: Yes, this is actually one area where the impact investing industry hasn’t evolved tremendously. This always used to be one of the biggest criticisms or skepticisms about the impact investing or environmental, social and corporate governance (ESG), like how do you even measure this? How do I know that I'm actually getting an impact? But after many decades of work, we do actually have the tools to do this. We use the GIIN Iris+ network system and it's emerging as the industry standard, and it's a very flexible method. But it does encapsulate a wide number of approaches. The challenge with impact investing is whether you're investing in, say, financial inclusion or education. The metrics of the things that you want to measure are a bit different. What Iris+ provides is a set of different metrics and a framework for making sense of those metrics, which at least allows investors into financial inclusion, micro finance, or education, agriculture, to look at their investments in the most similar way. Even beginning to compare across similar sectors, similar investment theses help a lot. If I'm an investor into education, these are the types of impact that I can have and begin, I wouldn't say necessarily to compare it perfectly, but to have a better sense of the different strengths of each particular investment thesis and impact basis as well.

FBP: Patamar Fund II was launched in 2020 and you aim to raise $150 million by the end of the year, The last count as of March 2020, you raised $60 million amid COVID-19. How is it performing so far, in terms of fundraising? How is the attitude of family offices and institutions to impact investing evolving? Have you observed any changes both to Patamar Fund II as well as the Beacon Fund? There was an aim to raise $50 million in the past year.

Surviving the pandemic

ST:  Obviously going out to just try and raise a fund during COVID-19 was somewhat challenging for all different fund managers and definitely it made us hit pause in some ways. Our first priority was really managing our portfolio. Like with most other investors, the first and  second quarters, we’re really focused on making sure that our portfolio companies were doing okay across the region, and I’m glad to say that that they are up till today. On the part of Patamar II, we're fortunate that we had the big fundraising push before COVID-19 really came into the scene and now we’re focused on deploying that capital. It’s very exciting to be doing that. We've made five investments. There are still a lot of investment activity happening despite COVID-19. We see a lot of interesting opportunities, especially coming from a Vietnam vantage point. The economy here never stopped growing even in 2020. There are a lot of exciting opportunities both here and around the region. We still see the opportunity there to deploy capital with an impact lens. On the Beacon Fund side, we launched that fund in the third quarter last year and we've seen a lot of interest in gender lens investing. It's perhaps perceived as quite a new thing in Asia, the underlying thesis has been around for much longer. There's been a lot of interest in gender equality, women's economic empowerment, and how that will be a powerful tool. It’s really making a change over the next decade. We've seen a lot of strong resonance there for that particular thesis as well.

Philanthropy vs. impact investments

As for how family offices in general approach impact investing, it's definitely been a big area of learning for everyone. Traditionally, in Asia particularly, there's been a bit of an idea that on one hand, we try and make as much money as possible, on the other hand, we have philanthropy efforts, which is very important, and I don't want impact investing to say, cannibalise philanthropy, for example. But impact investing kind of sits in between, obviously. It's both about generating a financial return as well as having impact. And it takes some time to wrap one's head around that. Maybe it doesn't feel quite as good as philanthropy because there seems to be some ulterior motive that you still want to make money while deploying that capital. The good thing is more and more people, not just family offices, the broader kind of investment community has better understanding of the role that impact investing has to play. The tools for measuring that impact are becoming more robust. That's a bit of a yardstick by which to measure that. As a result, there's definitely been an increase and interest in impact investing, but it's still early days, I would say. A lot of people are still dipping their toes in the water, getting started, which is fantastic to see but it will take a bit more time.

FBP: What you're saying is that for family offices, especially in Asia, the preferred route to investing for social good is still through philanthropy and it's slowly coming around to understanding impact investments. Is that the perception because it's investing for returns that is seen as more commercial? But at the same time, it's meant to be more transparent as well to be more structured, as compared to philanthropy or charity?

ST: I don't want to discredit charity either because that can also be very structured and strategic and that’s the concept of venture philanthropy, which is philanthropy but with very robust measurement systems and real assessments of the impact. But yes, broadly on that point, I'm aligned with you on that because there’s the spectrum of giving your money away and really maximising financial return. Then impact investing sits somewhere in between and people aren't sure how to look at it, especially when even within impact investing, there's a lot of different strategies, with a lot of different impacts in financial return targets. You have impact investors who are basically much like private equity funds, like say, a TPG Rise. And their goal is to still deliver top tier financial returns while having impact and that looks very different from a more boutique kind of impact investing funds.

FBP: Is it maximising returns or maximising impact? Or a balance of the two?

ST:  As I said, this is a spectrum. That's one thing that I've always really tried to emphasise about impact investing. We can't say one strategy is better than the other. It is possible to have a very intentional, authentic impact investing approach and be seeking to generate top tier returns but also have a strong impact. That happens when the impact is really embedded in the business model and you are in this kind of exciting high growth markets. However, there are other parts of the impact investing spectrum, where there is a real tradeoff between impact and financial return. You can't really have it all. Sometimes people look at it like, ‘Wow, I can do well by doing good.’ And, yes, to some extent, that's definitely true. But there's a lot of social and environmental problems, where if we go in it with a mindset of like I want to achieve a 20% plus internal rate of return (IRR), that's probably not going to happen. If you're really trying to tackle let's say, rural education in the most far-flung areas, that's challenging because the infrastructure isn't there. But there are many other parts that the whole ecosystem isn't set up for that to succeed. It's going to be more costly to make those kinds of investments. I'm not saying you can't make money during those kinds of things, but it's probably not going to scale as fast as your typical kind of venture capital or private equity investment might. So, depending on the impact that you want to have, you might have to take a trade off right on financial return, that’s the reality that we have to acknowledge about impact investing. In fact, I don't think it's a bad thing.

FBP: Is there a way to benchmark your portfolio returns? I assume now you have more than 20 companies, you just shared that you have additional five investments?

Finding success in impact investing

ST:  We use very typical benchmarks like Cambridge Associates just to benchmark returns because that's what exists. We would benchmark ourselves against, say, emerging markets, venture capital funds while we began investing more with a pilot or concept portfolio back in 2011. Even with our Fund One, we're still pretty early along in the fund, the full kind of 10-year fund life. So, it's hard to say definitively one way or another. But, yes, there is ample evidence to show that impact investing firms, following a more venture capital private equity strategy can achieve great returns. There's been strong examples of that in the microfinance sector. One of my co-founders actually set up one of the first equity microfinance funds and that achieved 26% net IRR. So, there are great benchmarks or examples, proof points out there that impact investing can make money. It really is a spectrum in the strategies from just getting your money back, capital preservation to very attractive financial returns plus impact as well.

FBP: There's been a boom in startup investment space in the past decade, before COVID-19 in terms of investment made by private impact investors, as well as funds deployed by development financial institutions, a very crowded space. How do you differentiate yourself? What kind of strategy do you set when the number of impact investment firms like Django investments in Singapore are bigger in terms of assets under management (AUMs) and in terms of identifying opportunities, grabbing a first bite of the cherry? How do you keep up with the bigger guys?

ST: That's definitely one area in which the landscape has changed. Eight years ago, there were barely any firms, or venture firms.  Then if you were looking at the underbanked or at “mom-and-pop” stores, nobody would be looking at that. Of course today, everyone's looking at how do we better serve the underbanked or unbanked?  How do we actually aggregate  “mom-and-pop” stores, disrupt fast moving consumer goods (FMCG) distribution? It has changed and  the difference is one, we've actually been working at understanding these markets and sectors for a decade and it's interesting. If we look at the kind of the needs, the product development, how to best serve the needs of the mass market and SMEs, it's something we've been thinking about and working on for a long time. It's not just about offering a lower price point or there's actually a much deeper product development cycle that needs to be gone through to really catch the needs.  Our firm has really developed expertise over time. That's one thing that we can offer to the entrepreneurs that we work with.  Perhaps even more important is that there are a lot of founders out there who are looking for investors who share their vision of building something, which is not just about making as much money as possible in the shortest amount of time possible. These founders, they still want to build a great, big company, have an exit one day, but to have somebody alongside them who shares their values of solving a social or environmental problem. That's really important for many of the founders that we talked to and that is what they've said why they want to work with us versus with the other firms, which as you say might have more capital, or a much bigger brand name but ultimately, we can be another voice at the table saying it's not just about hitting these numbers, or whatever the case might be. There could be a longer-term play here where we can add value to our customers, which can pay up financially. There's a great kind of medium to long term business imperatives that we can also highlight as impact investors as well.

FBP: We see you take a longer view of opportunities, but at the same time, when there are opportunities, you have also experienced your Patamar Fund I, the first exit of Mapan was in 2017 when the condition of the environment was very different. Tell us in terms of the rest of the portfolio, how are they developing and evolving?

Serving the mass market in time of crisis

ST:  As with all VC firms, there are some superstars and then there are some more middle of the road-type of players and then you obviously lose some. Overall, our companies have been scaling. COVID-19 was a bit of a setback for many companies and 2020 was generally not a big growth year for our portfolio. We did discover an interesting thing during COVID, which was because by their nature, a lot of our companies are catering to the mass market and some of their deep-seated needs, and they actually are more resilient and robust in a crisis. Things like education, agriculture as well, these basic needs, basic staples, being focused on companies which provide these types of products and services, we probably lost less companies during COVID-19 because we're not invested in travel, in hospitality, a lot of that very discretionary kind of consumer spend. We focus on the day-to-day needs of the mass market. And that's made our portfolio very resilient during COVID-19. We've got some companies which are scaling really well, attracting strategic investors and we see the ultimate exit path that has been similar to other firms with trade sales.

FBP: Are there specific technologies amongst your portfolio companies that are interesting and give them an edge? Or even new opportunities that you're looking at?

ST: The really exciting thing about our portfolio is how these technologies are applied to solve these pain points over the mass market, and how do you actually make it work in the real world? We don't necessarily look at technologies per se, but how can these actually be used in a way which is kind of accessible, understandable by this consumer segment? What I love to see, what my team loves to see in our entrepreneurs, is that really deep-seated understanding of their customer. That takes a lot of time, it takes a lot of effort. They’re really staying close to the customer. It really reflects in the way that the product and services are designed. That to us, is one of the big drivers of success of the companies that we've invested in.

FBP: Talking about gender lens investing. You are based in Ho Chi Minh, Vietnam, are you looking at specific opportunity or project specifically in that market? Or throughout the region as well for the Beacon Fund? How is it deployed? What pain points or what problems are you looking to solve in this segment? Looking at filling gender gap-kind of issues, whether it's economic participation, opportunity, education, health, political empowerment? What's the greatest need? And what is driving your strategy there?

ST:  One thing that I have observed investing over the past decade is that venture capital is a great model. I'm passionate about it, of course, but it actually isn't the right form of financing for a lot of businesses. Only less than 1% of businesses really make sense to be backed by the venture capital model because the venture capital model is really built on homeruns. So, these companies, which can scale really fast, get an exit and based on that kind of exponential growth potential. There are many businesses which simply do not have that huge market size to use technology quite in that way to be able to scale up that fast. That doesn't mean they're bad businesses. One of the things I've observed by just talking to a lot of entrepreneurs, particularly female entrepreneurs, which is how this came together, is that there are companies out there which are actually profitable, cashflow positive, which was interesting. Sometimes as a VC, you don't see many of those businesses. These companies are actually making money. These are growing at maybe 20% a year, 30% a year. Not like growing 5x every year, like the expectation. And we decided to create a fund around that, noticing that there weren’t many other sources of capital for these entrepreneurs to go to. We always talk about the missing middle in the impact investing space. To us, this really struck us as the missing middle. And we were like, maybe equity isn't the only form of finance to extend to these businesses. What about debt? Sometimes that can be a little less exciting as equity investing. But sometimes it's a benefit because debt doesn't demand exit in a certain number of years. It's self-liquidating, essentially. We noticed that there's a gap in the market in in the kind of debt lending space as well because the banks have limitations in the approach that they can follow. So, we saw an opportunity there. And there were very, high concentration of female entrepreneurs in this profile of business. Being able to support those kinds of businesses, which there are a lot in the region, that is that is kind of the underlying thesis of the Beacon Fund.

FBP: Beacon Fund so far is deployed mainly through debt to lending and financing?

ST: Correct! We've just started deployment because we only launched it towards the end of last year. But we're just about to close our first investments. And yes, it's a debt-focused approach.

FBP: Do you do it directly to the borrower, or you do it through an intermediary and that means you then have to take care of maintaining and managing the assets, underwriting the risk and so forth?

ST: Absolutely. We had to build a lot of capabilities in underwriting and like credit, which we have done and we are investing directly as debt into these companies. That came along with an interesting set of regulatory and practical operational things to bear in mind. But it's definitely possible and now we're glad to build that pipe, and I'm excited to learn more over the coming year.

FBP: It's a departure from what VC does in terms of capital and precision and exit. So, it’s more a lending business and you're looking at interest and spread?

ST: It is very different. That's why we're comfortable running both Patamar II as well as Beacon under the same platform. We don't really see them as competing with each other in terms of the types of businesses that we will be looking at all. Even from a fundraising perspective it's quite different. But we have to go where the market need is. That's always the entrepreneurial part of us as well. You go where there's a gap in the market, where there's a pain point, and this is a very big pain point or gap that that we saw in impact investing. Well to me, the good number of   highly impactful companies are just not going to the scale in a way that a VC would demand.  But they're still growing and they still need access to some financial capital. And how do you actually craft the right models for them? That's been a very interesting journey. That is just the beginning. Our ultimate question is how do we actually meet the needs of that missing middle of companies and really build a different financing model?

FBP: The assessment is quite a bit different and the target companies that you're lending to and you're looking at returns and in terms of repayment. Do you still look at impact as criteria or do you prioritise this more than the credit quality?

ST:  It's always both. Credit quality is critically important. The types of businesses we're looking at are different because we're looking for companies which have cash flows and can actually support debt. Otherwise, that's a bit unadvisable. But at the same time, we're looking for impact, particularly gender impacts, through these businesses. That's critically important as well.  There's still the same kind of focus on impact agenda assessment in these companies.

FBP: The main opportunities or the gaps that you're looking at are more in terms of being more commercial? Are these social enterprises that develop cash flows? Not looking at a specific gender issues to overcome. For example, are you looking at gender intersectional viability, like status opportunities, challenges faced by different subgroups?

Diverse and inclusive leadership

ST: I would say we are. We did notice there was a very high proportion of female founders, or female co-founders starting these types of businesses or the types of businesses they built. Women's ownership and leadership of these businesses are definitely some of the things we look at as a part of our investment process. To really celebrate and back a class of entrepreneurs, where there is diverse and inclusive leadership is a very important part of what we're doing. We also look at the policies within that company. For many of these companies, they have inclusive policies around gender, but other issues too amongst them to really support a more inclusive and gender diverse workforce as well. And finally, what kinds of products and services are these companies providing? We see that it's actually a huge opportunity, because a lot of these companies are in, say, the education space, or the healthcare space, or certain types of consumer products. The decision makers, as we know there are actually women, for the most part 80% of these types of decisions are made by women. How was this company serving the female consumer and really understanding their needs? To us, that's both a business opportunity as well as an impact opportunity in many cases because it just comes down to that point around where you know your consumer really well.

FBP:  How do you see the outlook for impact investment in the region, amidst and post COVID-19 global trends, opportunity and challenges that you see? Specific markets have a specific initiative. There are startups in India, in Singapore. There are also many initiatives at promoting startups, especially in the fintech areas. How do you see opportunities in the different markets going forward?

ST: COVID-19 was obviously not something any of us wanted to see or want to linger for much longer. But it did certainly highlight social and environmental issues in a different way during that time. We also realised that the tremendous interconnectedness of us all and that it highlighted  the need for us to be more intentional and work together on a larger scale to tackle some of these social and environmental problems, which really cannot be addressed by one country or one organisation alone. As we emerge out of COVID-19, there have been a lot of questions or a higher degree of interest both on impact investing, different kinds of philanthropic efforts, relief. But in some cases, it's actually what's most needed in the short term. The data was still pretty early but I've seen that ESG funds, social impact bond issuances, all of these things have actually grown through the last year. People are realising that ‘Every investment that I make has an impact. How do I go about it?  How can I actually explain that?’ So that narrative is changing. It might sound like a very small, soft thing, but it's actually very important. More and more investors are really trying to think through the impact of their investments. I don't think everyone's going to become an impact investor overnight. I don't think that makes sense. But at least people will say all of our investments have impact. Are we at least trying to avoid harm, if not trying to benefit our stakeholders? And then finally, are we actually trying to contribute to solutions? People are trying to place themselves on that spectrum of what kind of impacts their investments have? That's a very important question. Or a very important dialogue that's been started even amongst very mainstream kind of capital markets, which is great to see. That's one trend, which is not going away. It started much more on the ESG front, which is different from impact investing, but as a starting point. Impact investing will continue to see a lot of opportunity in Southeast Asia. Over the course of last year, we started deploying Fund I and Fund II. There are overwhelming opportunities right across sectors. There are exciting things that we're seeing around fintech and financial inclusion, not just of different lending models, but micro savings, investments, insurance.

Opportunities for investment

ST: The other really interesting one is around working with small and micro businesses and really empowering them to compete and thrive in a consolidating world. You can see that whether it's in the SME finance space, or these different platforms, to helping these small businesses sell better, manage their businesses better, there's been an explosion in that area as well. Healthcare, education, technology, all of the sectors that we've been focused on for a long time, we see these opportunities across the board.

FBP: Earlier you mentioned that for Fund II, you’re managing or helping the current portfolio companies whether through COVID-19 and at the same time you're deploying some of it to the five companies. With Beacon Fund, you've gone into a lending model, becoming like more of a fintech so to speak. On the Patamar Funds, will you be taking that approach as well? Are you also open to providing credit or debt to some of these startups?

ST: We see them as separate strategies and probably want to keep them separate right to avoid any kind of confusion. Yes, in some ways we could be seen a little bit like a fintech but I would say data is important.  Obviously fintech is trying to use alternative data sources, so that whole thesis. If you take a lot of the businesses where they are today, they’re not using QuickBooks. They're not even plugged in on e-commerce platforms. There's actually a lot of traditional brick and mortar businesses, which are professionally run. But there are still a significant portion of companies which aren't really tech savvy, and aren't really using a lot of different tech platforms. And to me, that's changing. Digitisation is the direction that everything is moving in. But it's not happening overnight. Investors who can capture those opportunities today and meet these businesses where they are, where we wish them to be, that to me is a really important part of what we do and the value of really being on the ground in these markets, like most of my team, we're in Jakarta, we're in Ho Chi Minh City. That's where the action is.

FBP: Great. Going forward, it looks increasingly interesting, as well, as companies become more digitalised. As we hope to see the end of COVID-19, opportunities will be there. Thank you so much Shuyin.

ST: Thank you. It's been it's been great fun. Thanks.