CRAZY RICH ASIANS

Southeast Asia’s superrich will get richer thanks to the Razer IPO

Southeast Asia’s richest families made their fortunes selling Indonesian clove cigarettes, introducing McDonald’s to Malaysia, and building one of Singapore’s biggest banks. Now they will add millions to their coffers through their holdings in Razer, a maker of high-precision mice, customizable keyboards, and powerful laptops, that has an imminent stock flotation in Hong Kong.

Razer’s founder is Singaporean Min-Liang Tan, who started the company at the age of 28 in 2005. It has raised $175 million in venture capital from firms like Intel Capital and Accel since then. But that institutional money only came in after Tan raised money from 15 individual angel investors—many of them prominent figures in Singapore. Through later investment rounds and mergers and acquisitions, tycoons from neighboring countries got into the Razer game.

The Razer investor list is a veritable who’s who of the region’s superrich and their overlapping interests, through working at the same banks, wealth funds, and law firms, or shared offshore investment vehicles. Here’s a rundown of what some of them stand to gain from the IPO, based on the company’s draft prospectus.

In estimating the current value of shares, Quartz used the value of shares from Razer’s last private financing round, a Series D in May 2017 that valued each share at $2,304. The price of shares when they are offered to the public should be even higher—that’s what Razer’s shareholders will hope—so treat the figures below as an underestimate. The tables below list what the owners originally paid, how much they received when they sold some holdings, then the value of the remaining holding using the May 2017 share price.

Lee Hsien Yang, Singapore

Lee Hsien Yang is the youngest child of Singapore’s first prime minister, Lee Kuan Yew. He’s currently the chairman of Singapore’s Civil Aviation Authority, but is best known for running regional telco giant Singtel from 1995 to 2007, a period marked by aggressive expansion. Recently he has been in the news for alleging abuse of power by his brother, the current prime minister, over the stymied demolition of the elder Lee’s house. He has said he will go into self-exile because of alleged state surveillance and intimidation.

Lee first invested in Razer in May 2007, then exercised a call option to buy more shares in September 2009. He sold a tranche of shares in 2016 during a corporate share buyback. All told, he should get paid at least $8.2 million from an initial investment of $300,000, a return of 27 times the capital invested. He always had a knack for picking a winner, according to Lee Kuan Yew in his book “Hard Truths to Keep Singapore Going:” “He’s good at investing, very shrewd. His mother would give him her money to invest. Most times, he invested wisely.”

Lee Hsien Yang’s Razer stake
Value of original holding $300,000
Realized gains $2 million
Value of remaining holding $6.2 million

Robert Budi Hartono and Michael Bambang Hartono, Indonesia

The Hartono brothers have a net worth of over $17 billion, according to Forbes, making them the richest people in Indonesia. They made their fortune selling clove cigarettes made under the Djarum brand, a business started by their father. They have parlayed that into a stake in Bank Central Asia, where most of their wealth is currently concentrated.

The Hartonos bought into Razer in April 2013, through their British Virgin Islands vehicle Davinia Investment. They took part in a Series B, pumping in $2.5 million. They then sold a sliver of that holding back to the company in 2016, netting over $1 million. They should make at least $10.7 million from their initial investment when Razer goes public.

The Hartono’s Razer stake
Value of original holding $2.5 million
Realized gains $1 million
Value of remaining holding $9.7 million

Vincent and Robin Tan, Malaysia

Vincent Tan and his son Robin run the sprawling Berjaya conglomerate, which includes property interests and the Malaysian franchises for McDonald’s, Starbucks, and other fast-food brands. It was the McDonald’s franchise that gave the elder Tan a shot at vast riches, which he turned into a retail and property empire. Tan’s interests now include soccer clubs around the world, a lottery business privatized by the Malaysian government, and a telco. Forbes pegs Tan’s net worth at $820 million.

The Tans swapped equity in their payments company, MOL, for Razer shares. The companies have a deal for MOL to distribute Razer’s virtual currency, zGold. The Tans own $19.9 million in Razer shares, but their potential upside depends on what Razer’s shares trade for when the company goes public.

Koh Boon Hwee, Singapore

Koh Boon Hwee has chaired or sat on the board of Singapore’s homegrown corporate titans—all of them with strong ties to the government. He chaired Singapore Airlines, Singtel, and DBS, Southeast Asia’s largest bank. He remains on the board of the sovereign wealth fund Temasek.

Koh also appears to have been instrumental in finding financial support for Razer in the early days. A prolific investor in technology startups, he invested in Razer sometime between its founding in 2005 and 2012, according to the draft prospectus.

Razer CEO Tan credits Koh as a “mentor” since he was young, although it’s not entirely clear how the two met. Tan doesn’t come from an especially wealthy family (father a property consultant, mother a homemaker), but he attended Singapore’s best schools and did well academically, although he always left it until the last minute to make the grade on exams. Tan worked as a lawyer at top local firm Rajah and Tann before quitting to start Razer.

Koh’s stake also includes a share in Pi Holdings, a British Virgin Islands vehicle that includes other well-known names in corporate Singapore like Wee Ee Chao, a banker and scion of the Wee banking family. His grandfather started the United Chinese Bank—now renamed the United Overseas Bank—in 1935 in colonial Singapore. It’s one of the country’s biggest banks. A number of former and current UOB, Rajah and Tann, and Temasek executives were also part of the crop of 15 angel investors who gave Razer its early tranche of $6.3 million.

Koh Boon Hwee’s Razer stake
Value of original holding $198,700
Realized gains $666,400
Value of remaining holding $37 million

The biggest beneficiary of the flotation will be Min-Liang Tan and his family. They control over 41% of the shares through a vehicle called Chen Family (Hivemind) Holdings. That holding is worth $794 million based on the last round of private financing in May. If the shares trade upward of that last valuation, the stake will be worth significantly more. Razer didn’t simply receive the investment and blessings of Southeast Asia’s elites—it also minted a new superrich family to join their ranks.


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