ADM Capital (ADM) is an Asian

investment management Investment management (sometimes referred to more generally as financial asset management) is the professional asset management of various Security (finance), securities, including shareholdings, Bond (finance), bonds, and other assets, such as r ...

firm headquartered in Hong Kong. The firm focuses on

private credit Private credit is an asset defined by non-bank lending where the debt is not issued or traded on the public markets. "Private credit" can also be referred to as " direct lending" or " private lending". It is a subset of "alternative credit". E ...

lending but also makes investments related to

distressed debt In corporate finance, distressed securities are securities over companies or government entities that are experiencing financial or operational distress, default, or are under bankruptcy. As far as debt securities, this is called distressed debt. ...

and

private equity Private equity (PE) is stock in a private company that does not offer stock to the general public; instead it is offered to specialized investment funds and limited partnerships that take an active role in the management and structuring of the co ...

Background

ADM was founded in 1998 by Chris Botsford, Deny Firth and Robert Appleby who came from

investment banking Investment banking is an advisory-based financial service for institutional investors, corporations, governments, and similar clients. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by und ...

backgrounds. After the

1997 Asian financial crisis The 1997 Asian financial crisis gripped much of East Asia, East and Southeast Asia during the late 1990s. The crisis began in Thailand in July 1997 before spreading to several other countries with a ripple effect, raising fears of a worldwide eco ...

, the firm's objective was to invest in the region's distressed debt and

special situation A special situation in finance is an atypical event which has the high potential to alter the future course of a business, materially impacting the company's value. The connotation of the event may be both positive (for example, merger or acquisiti ...

s. The

resulted in $600 billion of distressed debt which was an opportunity for ADM. The firm which described itself cross between a private equity and a distressed debt strategy was to buy debt from existing creditors, then help restructure the company that issued the debt before selling out and reaping annualised

rates of return In finance, return is a profit on an investment. It comprises any change in value of the investment, and/or cash flows (or securities, or other investments) which the investor receives from that investment over a specified time period, such as int ...

of over 25%. ADM did not hide its predatory nature but stated based on its strict ethics it avoided

hostile takeovers In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are publicly listed, in contrast to the acquisi ...

and socially or environmentally damaging industries. The

Asian Development Bank The Asian Development Bank (ADB) is a regional development bank to promote social and economic development in Asia. The bank is headquartered in Metro Manila, Philippines and maintains 31 field offices around the world. The bank was establishe ...

invested in ADM's funds to help soften the firm's image. At the time the focus of ADM was on

Southeast Asia Southeast Asia is the geographical United Nations geoscheme for Asia#South-eastern Asia, southeastern region of Asia, consisting of the regions that are situated south of China, east of the Indian subcontinent, and northwest of the Mainland Au ...

. Investments included

India Cements The India Cements Limited is a cement manufacturing company based in Chennai. It is the 9th largest listed cement company in India by revenue. The company was headed by former International Cricket Council chairman and Board of Control for Crick ...

, the Bangkok Mass Transit System and

Rizal Commercial Banking Corporation The Rizal Commercial Banking Corporation (), commonly known as RCBC (), is one of the largest universal banks in the Philippines with total consolidated resources of Ph₱ 1.2 trillion. It was established in 1960 as a development bank and is ...

. In the 2000s, ADM started investing in Chinese

non-performing loan A non-performing loan (NPL) is a bank loan that is subject to late repayment or is unlikely to be repaid by the borrower in full. Non-performing loans represent a major challenge for the banking sector, as they reduce profitability. They are ofte ...

s. In 2006, ADM established the ADM Capital Foundation which invested in philanthropic causes in Asia. ADM was approached by M’Lop Tapang, a Cambodian organization working with children, to help secure funding for a permanent day centre. The project lead to the creation of the foundation. In 2012, it had 10 employees and had invested $7 million into projects since establishment. The organisation Giving Evidence analysed 10 years of conducted a study of the funding that ADM Capital Foundation had issued in its initial 10 years. Released in 2017, the review concluded that there was no correlation between the outcome and the amount of money given. During the

2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...

, ADM raised an additional $1 billion for its funds to invest in distressed debt. This was due to the opportunities in the period such as Chinese property and manufacturing companies facing debt repayment difficulties as well as the Australian market in general. In 2012, it was reported that ADM was moving its focus towards private credit financing due to European banks withdrawing capital from Asia and less distressed debt deals as a result of Asia's economy performing well. ADM launched a lending facility in partnership with

International Finance Corporation The International Finance Corporation (IFC) is an international financial institution headquartered in Washington, D.C. and a member of the World Bank Group that offers investment, advisory, and asset-management services to encourage private ...

(IFC) to provide loans to financially stressed mid-sized Asian companies. Such companies could not obtain financing via traditional channels could obtain loans from ADM that were generally short term ranging from $20 million to $50 million each. ADM later on expanded into Europe and

Kazakhstan Kazakhstan, officially the Republic of Kazakhstan, is a landlocked country primarily in Central Asia, with a European Kazakhstan, small portion in Eastern Europe. It borders Russia to the Kazakhstan–Russia border, north and west, China to th ...

to carry out private equity activities. Investors of funds focused on those areas included

Black Sea Trade and Development Bank The Black Sea Trade and Development Bank (BSTDB) is an international development finance institution serving the eleven member founding countries of the Black Sea Economic Cooperation, a regional economic organization. It supports economic deve ...

European Bank for Reconstruction and Development The European Bank for Reconstruction and Development, shortened to EBRD ( French: ''Banque européenne pour la reconstruction et le développement'' or ''BERD''), is an international financial institution founded in 1991 in Paris. As a multilat ...

and the IFC. In 2014, ADM restructured its Central Eastern Europe and Kazakhstan team in 2014 to provide greater autonomy. In August 2018, ADM spun out its Central Eastern Europe and Kazakhstan business via

management buyout A management buyout (MBO) is a form of acquisition in which a company's existing managers acquire a large part, or all, of the company, whether from a parent company or individual. Management- and/or leveraged buyouts became noted phenomena of 19 ...

to form CCL Capital. ADM did not retain an economic interest in the new firm as it wanted to focus on its existing business activities. In 2016, ADM launched the Cibus business which focused on investing in Agribusiness companies in the

OECD The Organisation for Economic Co-operation and Development (OECD; , OCDE) is an international organization, intergovernmental organization with 38 member countries, founded in 1961 to stimulate economic progress and international trade, wor ...

markets via equity and equity-linked debt. The debut Cibus fund raised $452 million to invest in high-growth companies. In November 2020, it was reported ADM was raising a $500 million debt fund that focused on financing Southeast Asian renewable energy projects. The

Asian Infrastructure Investment Bank The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank and international financial institution that aims to collectively improve economic and social outcomes in Asia. It is the world's second largest multi-lateral d ...

committed $100 million to it. In March 2024, ADM stated Chinese companies seeking outbound investments presented private credit lending opportunities since they could not get funding from local banks due to complexities of cross-border transactions. ADM had funded China Minsheng Investment Group's acquisition of

Grouse Mountain Grouse Mountain is one of the North Shore Mountains of the Pacific Ranges in the District Municipality of North Vancouver, British Columbia, Canada. With a maximum elevation of over 1,200 m (4,100 ft) at its peak, the mountain is t ...

Resort. In July 2024, it was reported that Seviora, an asset management unit of

Temasek Temasek ( or , also spelt Temasik or Tumasik) is an early recorded name of a settlement on the site of modern Singapore. The name appears in early Malay and Javanese literature, and it is also recorded in Yuan and Ming Chinese documents ...

had acquired a

minority interest In accounting, minority interest (or non-controlling interest) is the portion of a subsidiary corporation's stock that is not owned by the parent corporation. The magnitude of the minority interest in the subsidiary company is generally less than ...

stake of ADM. The purpose was to allow Seviora to offer broader range of middle market private credit products.

References

External links

* {{authority control 1998 establishments in Hong Kong Financial services companies established in 1998 Investment management companies of Hong Kong Mezzanine capital investment firms Private equity firms of Hong Kong