Celebrity Life

Aside from his property investment interests, businessman Jonathan Cheng tells us about the things he loves, from fast cars in Europe to hopping on a motorbike for roadside breakfasts in Koh Samui.

On first glance, you’d think that Jonathan Cheng -- tall and casually dressed in faded jeans and collarless dark blue shirt -- was an impresario or perhaps a successful restaurateur, or maybe the director of an international advertising agency. Your first impression would almost certainly be wrong; in fact, you could spend hours making wild guesses as to what exactly it is that Cheng does and it’s odds-on that you still wouldn’t get it right.

“Even when I go to meetings with banks or other financial institutions I dress like this," says Cheng, who’s actually the CEO and managing director of Hong Kong-based LC Capital, a boutique Asia Pacific-oriented private-equity fund that -- partly thanks to a holiday he took several years ago -- focuses on property development among other multi-strategy plays.

Cheng explains that his foray into real estate began almost as an aside when, on a skiing trip to Niseko in northern Japan, he found a plot of land. “I’d been running a private-equity fund -- a lot of equity trading, company restructuring -- very different from what we’re doing now," he says. “But when I saw the property in Niseko I fell in love with it. So I rang up some people to see if we could do it together."

It turned out to be the foundation of a portfolio of properties currently worth in the region of US$175 million, in locations as far-flung as Japan or Perth in Western Australia, the city to which Cheng had moved to attend high school and university. “When it started," he says, “it was a kind of a one-off thing, more of a fun project than anything else. But it took off, and because I was often in the area I went around looking - not actively, but when they’re on the radar they’re on the radar, right? And then other things popped out of the woodwork and the numbers made sense, so we got into it full-time. We started Infinity Capital Group as a property developer - and the next thing we know, after having two or three people in the office, we’ve got 25 or 26."

Although clearly a man of taste and with a penchant for design, Cheng doesn’t get too involved with the architectural side of the properties he develops. “I have my likes and dislikes and always give my input," he says, “but I see things more from a numbers perspective. In areas where we’re able to control construction quality, construction timetables, we’ll go in that way because there’s more value to extract. But right now we’re trying to grow the brand and get into more areas, and when that happens we need to take a look at mature properties as well. Now’s a good time, because tourism’s been hit a lot, things are coming out on the market and there’s a lot of value to be had."

In fact, so busy is he these days that Cheng doesn’t have much time for many of his favourite activities. “I enjoy skiing a lot and I still go snorkelling if I can get the chance. I used to enjoy golf, but I’ve got a bad back so these days it hasn’t been much of a priority for me. And from a work perspective I don’t have much time. Skiing’s definitely nice but obviously with the business I can’t go around the globe chasing the snow like some people can."

Of the passions that he is able regularly to indulge, watches and - perhaps not surprisingly - cars feature high on the list - indeed the first time I met him I couldn’t help noticing the Patek Philippe discreetly strapped to his wrist. “I’ve got several watches and I like to be understated. It’s the only accessory I wear except for a necklace, which was given to me by my mum many years ago. I think men should keep it simple.

“I rotate the watches and wear a different one every couple of days. I don’t keep them on a winder because if you don’t wear them and they stop, you’re not wearing down the mechanics. This is purely my own opinion and I know a lot of people think otherwise, but I think the more you use them the more worn out they get, just like a car."

Which brings us - and all very naturally - to the photograph in his office lobby of Cheng posing with a Lamborghini at a roadside in what looks very much like Europe. I can’t help asking him if it’s his.

“I used to go over to Europe every year with my mates," he explains. “There’d be nine or 10 of us and a friend who’d organise it for us. We’d pick up a fleet of supercars and drive through France - Champagne, Burgundy, places like that - and end up in a quaint hotel or castle where we’d unwind every night with a wine dinner, and the next day we’d continue on our way. So yeah, I love cars, I love driving and I love getting it out of my system once in a while. A few years ago, we started in Munich and ended up in Monaco for the Grand Prix, and there are stretches of autobahn and autostrada where you can really give it a squeeze...

“Here in Hong Kong, I’ve got a Ferrari 488 - a beautiful car - and a Bentley Continental [both of which he tells me are coupes]. I like convertibles but over here it’s like you’re getting too much attention sometimes, especially if you’re caught up in a jam and you feel like an animal in a cage. I remember telling myself when I was 35 that I wanted to buy a Bentley, but one of my mates told me, 'Hey, it’s a bit early for you - you should get one after you’re 40.’ I’m 45 now, and I’ve got this bad back, and it’s really, really comfortable.

Although Cheng jokes that he hasn’t reached his mid-life crisis quite yet, he does admit to looking around for an older Porsche. “I’m a 911 fan boy," he says, “and the 993 [the last of the air-cooled 911s, which ceased production more than 20 years ago] is beautiful. I’m looking around for one that I can register and put on the road. I try to drive every day and swap the cars around, just like my watches, but sometimes I have to use the company car, especially if I’m having a little bit of a drink after work with clients."

And what about those increasingly rare occasions when he’s able to get away from Hong Kong to relax and unwind? “I feel most comfortable in a beach-resort setting," Cheng says. “So every two or three months I try to get away for a weekend, to Bali, Samui or Phuket. The Maldives are beautiful but it’s not something you can do for two or three nights, just nip out and nip back in - plus if you go to islands that require a seaplane transfer it gets even more complicated.

“I like Samui a lot, because it’s not so commercial, it’s not crowded, not many cars and I feel safe alone on a motorbike. Contrary to what you might think, I like going to roadside stalls, so I rent a motorbike and go to the little stalls for breakfast, just in flip flops and a singlet. If I can get out every couple of months to places like that, it would be fantastic. I think that would be perfect."

The post LC Capital CEO Jonathan Cheng’s Driving Passion appeared first on Prestige Online - Hong Kong.

Founder of LC Capital, Jonathan Cheng is a new breed of private equity and property developer. The entrepreneur dissects the market.

Now more than ever, alternative assets and private equity are under challenge to play an important role and deliver returns as global markets and economies struggle to recover after the pandemic. The firms that successfully emerge from the global wreckage will require uniquely focussed strategies and talented managers.
LC Capital was founded in 2015. Jonathan Cheng is its current Group CEO and Managing Director. LC Capital is a boutique, specialised investment operation favouring organic growth of assets under management and focusing on the Asia-Pacific region. It combines international management expertise of private equity with local knowledge and characteristics covering property development, and its associated business lines.
In property development it prefers to buy raw land and build new projects. Instead of refurbishing properties, LC Capital aims to add value to its investments besides just providing capital. Taking majority control over corporate governance allows LC Capital to strategically manoeuvre business direction of its projects and investment vehicles. And majority control allows it to influence corporate governance and strategic business direction.
“We aim to be active not passive and seek to cultivate and drive holistic business cultures,” says Cheng. “We step into design and create synergistic business strategies to establish a vision, brand and ultimately an exit.” Property is developed through its associated company Infinity Capital Group. Since 2015, LC Capital has completed and is currently developing $175 million in property in the Asia-Pacific region, including Singapore, Australia and Japan.

[caption id="attachment_206384" align="alignnone" width="1300"] The TELLUS on Parker Hotel development in Perth, Australia[/caption]

LC Capital positions and focusses itself as a disciplined private-equity manager – a smarter version of a typical property developer that seeks to create and sustain value in its investments. It combines food-and- beverage expertise, ownership and management in its property investments and developments. “Extracting a premium from the potential synergy between the collaboration between landlord and tenant represents a major opportunity and challenge if we assume both roles,” says Cheng. “For LC Capital, this relationship doesn’t necessarily have to be adversarial.”
“The traditional tenant-landlord relationship will always be contentious – there’s little sympathy on either side. Tenants rarely meet landlords and there’s no personal interaction as in the past, when the landlord would personally collect rent and visit the tenant. However, since LC Capital controls its properties and acts as the tenant, so the relationship is more collaborative with any partners we work with on the F&B concept.”
It began its property-development activities with luxury hotels and high-end residences in Niseko, Japan and Australia. LC Capital retains ownership and management in hotels and their food and beverage outlets. “Entering the food and beverage business was a natural extension of their ambition to create and sustain value in our properties,” Cheng explains.

[caption id="attachment_206385" align="alignnone" width="1426"] The TELLUS villas development in Niseko, Japan[/caption]

The vision beyond property construction is to build a unified brand across properties. Each unit in Niseko features its own onsen and a commitment to creating a sense of quality of cosiness, warmth and belonging in each unit.

[caption id="attachment_206387" align="alignnone" width="1500"] Private onsen at TELLUS Niseko, which opened late last year[/caption]

Cheng describes his hands-on style approach in making and managing investments and projects. He disavows management by spreadsheet, as he favours meeting employees and spends significant time on sites.

“Understanding your businesses at the ground level is vital for success.”

Cheng assumes a cautious and nuanced view of how business and industry will emerge from the Covid-19 pandemic. “The post- pandemic environment will provoke a change in outlook, not necessarily a wholesale change in fundamental business and investment strategies.”
“Tourist numbers are presently at a standstill and revenues will be affected going forward. It will change the way our properties adapt to changing business conditions. The massive number of aircraft groundings are an indication of the severity of the situation. When the financial markets normalise, the economy and business will recalibrate.”
Cheng emphasises and leads an organisational learning process that enhances the brands of LC Capital, its businesses and the properties by creating a total, all-encompassing experience. For example, its TELLUS Lounge in Hong Kong is an expression of quality and sophistication. Cheng also explains his conservative rollout plans for TELLUS: “We were prepared to accept capital expenditures for the initial start-up period of 18 months in order to establish the business and brand.”

[caption id="attachment_206394" align="alignnone" width="1300"] LC Capital's founder, CEO and Managing Director, Jonathan Cheng | Jacket Loro Piana[/caption]

Cheng describes himself as an entrepreneur. And he defines that through the importance of getting out of one’s comfort zone and always sensing and feeling. “Business schools can teach a lot, but they only provide a framework for your experience. And with experience comes acumen. I strive to achieve a natural balance between theory and practice.”
LC Capital’s seeks to grow its property development arm in Asia Pacific: it’s currently looking at acquiring land in Bali, among other opportunities overseas. Moving forward, there has to be scalability.
“An effective investor and operator understands a market, how a company’s operations succeed in that market, and develops a sense of what’s going on around them. Most of all, it’s all about the rhythm. If you make mistakes because of poor timing you can always get your rhythm back.”

The post How Jonathan Cheng of LC Capital is Driving Value in an Uncertain Market appeared first on Prestige Online - Hong Kong.