September Session: Chaerhan Chun w/ YPO

Strategic Investment: Insights from Chaerhan Chun

Section 1: Finding Investment Style

Q1: What are the key differences between investing in emerging and developed markets?

Emerging and developed markets differ significantly in their legal frameworks, data quality, governance structures, and risk visibility. While developed markets often provide clearer rules and more transparent data, emerging markets can be highly attractive because investors are able to build unique insights that are not broadly available. This creates proprietary advantages and opportunities for differentiated value creation.

Q2: How does investing in minority stakes differ from control stakes?

Minority stakes offer limited decision-making authority but often come with structured downside protection. Upside potential may be capped, and change tends to be slower. Control stakes, on the other hand, provide full decision-making power and accountability, with unlimited upside potential. However, they also require bearing full responsibility for risks and demand broader capabilities to drive rapid transformation.

Q3: How do asset acquisitions differ from equity acquisitions?

Asset acquisitions are akin to “marrying someone who has been divorced.” The target may lack established management capabilities, the entry price is lower, but there is a greater risk of key people leaving. Equity acquisitions are more like “marrying into a family.” They are generally more expensive due to the control premium, and investors inherit both the positive and negative aspects of the company—including its liabilities.

Section 2: Investment Cases

Q1: Can you share an example of investing in Vietnam’s pharmacy sector?

Entry required a complex structure because of foreign ownership restrictions. Following COVID-19, the company faced severe challenges—inventory buildup and aggressive expansion consumed USD 100 million in just six months. This led to a down-round financing and highly unfavorable terms in subsequent fundraising.

Q2: What about your experience with a local pharmaceutical company?

The investment began with a 24% minority stake and expanded to 65% over 1.5 years through negotiations with existing shareholders. After gaining control, improvements in production, sales, and financial systems drove 60% revenue growth and EBITDA margin expansion from 17% to 23%. The investment was exited after four years with an approximate IRR of 20%.

Q3: How did the Vingroup case illustrate strategic outcomes beyond financial returns?

Vingroup abruptly shifted from internal combustion engines to electric vehicles, causing its share price to fall dramatically. With only one board seat, SK’s influence was limited. However, the investment strengthened SK’s positioning and reputation in Vietnam, demonstrating that strategic benefits can sometimes outweigh purely financial considerations.

Section 3: Key Traits of Successful Investors

Q1: Why is courage important in investing?

Courage enables investors to move forward despite uncertainty or the possibility of failure. It underpins bold strategic moves and transformative deals, empowering investors to act decisively in high-stakes situations.

Q2: How does curiosity create an advantage?

Curiosity is the foundation for building trust and lasting relationships. By showing genuine interest in people, cultures, and organizations, investors gain insights that numbers alone cannot provide. This openness fosters collaboration and ultimately creates a competitive edge in investing.

Q3: What role does judgement play?

Judgement allows investors to evaluate risks, responsibilities, and opportunities with balance and objectivity. It is essential in deciding between different structures—minority vs. control, asset vs. equity—while remaining clear-headed under uncertainty.

Q4: Why is grit indispensable?

Grit combines perseverance and resilience when markets turn volatile, laws shift, or partners fail. Investors with grit adapt, recover quickly, and remain committed to long-term goals, ensuring that bold ideas are carried through into real results.

Section 4: Practical Insights

Q1: How do shifting legal frameworks affect investments?

Even carefully negotiated contractual protections can be undermined by regulatory changes. For this reason, exit strategies should always include multiple contingencies.

Q2: How can investors align investment style with personal disposition?

Choosing between minority and control stakes should reflect personal preference: whether one values downside protection with limited influence or prefers full accountability with the power to drive change.

Q3: What qualities are essential for a successful investor?

Beyond technical skills, successful investors share core attributes: genuine curiosity about people, courage to face uncertainty, emotional intelligence, and humility to operate from a position of service. Many of these qualities are cultivated through hands-on experience, such as investment banking or direct deal-making.

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From Our Mentees 💬

Soobin, Mentee

"The lecture from a speaker with extensive Strategic Investment experience gave me the opportunity to reflect on my own investment style, while her career journey as a woman in finance reminded me of the importance of building my unique edge; I aspire to grow as a finance professional who balances strong EQ with bold judgment."

Jiyun, Mentee

"The speaker highlighted that large corporations focus on long-term strategic investments rather than reacting to individual outcomes, which reaffirmed for me the importance of such an environment for strategic investors. I was also impressed by the interactive format, with thoughtful questions that encouraged reflection on different investment approaches."

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