Taking the leap of faith

STRATEGIC INVESTMENTS: Sustainability is a theme close to Robert Yap's heart.

STRATEGIC INVESTMENTS: Sustainability is a theme close to Robert Yap's heart.

July 7, 2020

Former corporate insider Robert Yap's choice of investments reflects his strength in IT and deeply held convictions such as sustainability.

ENTREPRENEUR and tech investor Robert Yap could have been satisfied with his success as a corporate insider. With a fortuitous combination of IT smarts, financial acumen and a genial personality, he rose through the ranks into the C-suite in companies such as PSA International and the DFS Group.

Yet even as he threw himself into his various roles, he also single-mindedly nurtured the seeds of financial independence. In 2012, at age 48, his corporate and personal efforts coalesced. He was ready to strike out on his own as a personal investor with a family office vehicle.

Today, the chairman of Sunseap Group's choice of investments and roles reflects not only his strength in IT, but also deeply held convictions such as sustainability.

"I received a kind of epiphany in 2012 that I needed to strike out on my own. It was interesting because one of the things I practiced in my life was to be financially independent as young as I could, to basically invest in my career and in myself as an asset. I also started investing in properties and via private banks. By the time I was in my late 30s or early 40s, my passive income was as much as my corporate income.

"In 2012, when I was close to 10 years with DFS, I felt a strong leading to step out on my own. I wanted my own family office. I wanted to build something lasting and impactful. I just didn't know what, with whom or how. If I said today that I planned it all, that I knew all about sustainability, it would be a fiction. It was more of a discovery process. After I stepped down in 2014, there were many offers to become CEO and run companies. But I wasn't really interested in that."

Today, in addition to his chairmanship of Sunseap, Singapore's leading solar power provider, he has two investment vehicles – Trirec which focuses on renewable energy and Jubilee Partners. Sunseap is among Trirec's portfolio investments. One of his most promising investments is Skylab, a company at the forefront of edge computing; it is held under Jubilee Partners. In addition to a number of directorships, he also has a foundation, called Charis-Sozo.

He recalls that he had mixed feelings when he stepped away from DFS at end-2014, after serving an unusually long notice or transition period of close to two years. "DFS treated me very kindly and generously. I wanted to give them enough lead time to look for a successor… The values that I hold as a corporate citizen were very much shaped during my 10 years at DFS."

But he was ready for a new phase. "Most CEOs and presidents would agree that 95 per cent of your time is spent managing people. You are in the trenches only 5 per cent of the time. I wanted to start looking at what it means to build businesses, not at the management level but at a strategic level, where I can contribute in terms of leadership thinking, corporate efficacies, best practices, and bring the experiences I've garnered over the last 30 years to help companies evolve into emerging startups, and hopefully one day to become unicorns.

"In the first year of my corporate retirement I made a lot of mistakes, first by taking on roles I knew very little about and second by investing in companies that had a lot of promising aspirations. But execution was a different matter altogether."

The turning point was his meeting around 2015 with angel investor Melvyn Yeo, principal of Thirdrock, who in turn introduced him to Lawrence Wu, co-founder of Sunseap. The partnership among the three would spark a proverbial synergy far beyond the sum of individual parts. It also helped to solidify Mr Yap's strategic investment direction, focusing on three key areas – technology, renewable energy and healthcare. Technology, he says, is his "comfort zone", honed through years of experience in multinationals as head of IT. Between 2006 and 2014 he was a member of IBM Corp global advisory board.

SUSTAINABILITY grew out of personal convictions. "There is a lot of buzz in the market on climate change and the need to move towards more sustainable capabilities. I want to get involved because it's close to my own personal and religious beliefs in terms of being a responsible citizen. I have four daughters. I like to think that whatever I'm doing now contributes in some small part to their future and eventually my grandchildren, who will live beyond my lifetime. This is something close to my heart. I'm just very blessed that the investment we made in Sunseap has taken a very strong turn in terms of success."

The Sunseap Group is the largest clean energy solution provider in Singapore. It boasts completed and pipeline solar projects of close to 2 gigawatt-peak (GWp) in Singapore, South-east Asia and the Pacific region. The group's services run the gamut of finance, design installation and maintenance.

Skylab is another company that may well become pivotal to the next phase of digital transformation for companies and even cities. Among others, it provides critical Internet of Things (IoT) data logistics solutions for enterprises, helping them optimise their assets and manage their resources. It is at the forefront of edge computing in Singapore. Edge computing is a method of processing data close to the source, such as connected devices. This is envisioned as the key enabler for smart cities.

Nearly six years since leaving his corporate career, Mr Yap has distilled a number of principles that comprise his secret sauce in investing. "Number one is that the founders must have integrity, be trustworthy and have a very strong sense of purpose. I saw that in Sunseap's founders straightaway. The second ingredient is the ability of the people, their knowledge and commitment to success. And three is the company must be in a sunrise industry. It needs to be something with a lot of momentum."

"My partners and I believe in investing in champions. When we spot a champion we go all out to support them, give them whatever skills we have garnered over the past 30 years to help them to be successful, and yet trying not to over-influence them. What we learnt 20 to 30 years ago must not be constraining. It must be liberating, helping them to understand things like corporate governance, fiduciary, team leadership development, and building a sustainable organisation."

Amid the vast array of startups striving to be the next unicorn, how does he spot potential winners?

He believes that the investor must himself or herself be a wide learner, able to read and grasp trends in the industry. "In the technology space that I'm in, I want to focus on infrastructure. We want to build the conduit that can either allow data harvesting, transportation or data processing, or the enablement of the distribution of packets of applications – in other words, the plumbing."

THE second ingredient is that the product or service must be scalable. "Many people make an investment in a company today that is good technologically. But it's a one-trick pony, good only for that time and season… You must be able to look to the future, and see whether the investment may actually go through a serious diminution of its relevance."

Skylab's work on edge computing is an example of an investment that serves as so-called plumbing for the next phase of digital transformation.

Of Skylab, he says: "What if someone comes and tells you – I can now build a smart lamppost. This lamppost can do temperature sensing, measure electrical usage, transmit wifi for households nearby. I can also do video analytics in terms of the cars passing through. I can pull this data and send to you. What is the value of the device?

"Actually the value lies not so much in the device, but in the data. Data is the new currency, the new oil. If I can do this for one lamppost, the whole island may need it. Suddenly you can multiply (the applications). Cities like Ho Chi Minh or Jakarta need systems to tell them the traffic patterns, use predictive analytics to optimise the traffic flow. When you look at this capability, you realise that the company is a potential unicorn – as long as they own the intellectual property and the patents, which is something most entrepreneurs and founders forget."

MR YAP takes an active role in his portfolio companies, taking care to strike a balance between stewardship and giving investees the leeway to act and think independently. He seeks a board seat in investees, for example, or the chairmanship. He is Skylab Group chairman.

"The old-school approach where the board is passive is gone. The 21st century board directors do not do the work of management. But they're actively involved in the strategic outcomes and direction of the company. The board helps the company founders, to basically move them in the right direction with all the firepower they can bring to the table. If a board doesn't add value, then it's dysfunctional.

"As chairman and a board member, I feel I'm protecting the shareholders' interests, of whom I'm one. As a shareholder of a company I would want to chairman to do what I'm doing, adding value, taking them to a place where on their own, they may have limited exposure."

He has an eye for detail and a nose for numbers that can take potential investees aback. "I like micro details. I feel very uncomfortable if there is only an executive summary, and no proper documentation or trail in terms of how a particular investment or divestment was made. I have very strong expectations of management to produce reports for me. I read every single page of board submissions.

"By the time I jump into a board meeting and chair it, we're about 30 to 40 miles an hour on the road. Any board member who starts from zero isn't going to work."

The quickest way to get him to spurn an investment is to present a financial model backed by few details. "I always tell target companies – please drown me with your spreadsheets. Very few of them have done that. They think many board members and investors are very superficial. But I'm a micro person... What is a granularity in terms of how you build your numbers up? We go through the spreadsheets again and again, until I'm convinced that you've got it."

Source from The Business Times