Subject: Re: RREAF follow-up
From: "Devon Archer" <[email-masked]>
To: "Hunter Biden" <[email-masked]>
Date: Wed, 4 May 2011 08:07:13 -0400

....so what does she want from us???  I'm confused.

Devon Archer
+646 436 3745

Please excuse typos as this message was sent from my handheld device.

On May 4, 2011, at 7:13 AM, "侯文齡(Juliana Hou )" <[email-masked]<mailto:[email-masked]>> wrote:

Devon,

Instead of answering your question point by point, I’d like to explain more at an aggregate level about what we do.

The (Chinatrust) group has an objective eventually to set up a management company for the private equity it is to raise. Actually we can reasonably expect to close raising a fund by the end of this year.  For this fund (which is likely to attract a significant Chinese financial institution to be the anchor investor), it will focus on growth opportunities (with no control) in the greater China region to leverage on and to create synergy with Chinatrust Commercial Bank’s client base. Along the way of ramping up our principal investment business, we have made various investments in the areas of mezzanine debt in cooperation with KKR and of venture capital which strategically supports Chinatrust’s business development. Our VC focused on Taiwanese high-tech names in the past.

We are also in process of setting up a distressed-asset fund (to be Asia focused) with a renowned PE player, if we get through local regulatory scrutiny. In addition, the acquisition of a local insurance company (which expects regulatory approval soon) will add capacity to Chinatrust for its direct investment business.  These events are important to shaping what we become in the future.

Funding source/approval process
Except for the mezzanine debt investment, which directly utilized the commercial bank’s balance sheet, other investments were done via subsidiaries controlled by the financial holding, whose capital have mostly been the dividends up by the bank. For debt and equity, we in general have a formalized two-stage approval process- one at the originating business unit and the other at the financial holding’s respective committees. However, for PE investment the process is lengthened as the deals usually need be also approved by the board of the financial holding. Timing wise, the review/approval process can take a minimum of three weeks for debt and one to two months for equity (primary deals). It to a certain extent depends on the nature of the transaction; an early stage VC investment may require a longer due diligence.

Immediate focus
As mezzanine debt investment can directly tap the bank’s balance sheet (and thus less capital constraint), we are seeking suitable targets from both primary and secondary to build up a portfolio this year (non-distressed, non-bank; non-real-estate) to bring in cash flow. (We made two investments earlier this year.) I will be happy to look into them if you happen to have mezz in your pipeline.

We have set the directions but some details are still to be discovered and determined when dealing with a quite dynamic and fluid world as is.  Please do let me know if you have further questions.

Best regards,

Juliana

Juliana Hou
SVP, Principal Investment Division
Chinatrust Commercial Bank
No.3, Sung Shou Road, Taipei 110, Taiwan
Tel: +886 2 2722 2002 ext 1225
Fax:+886 2 8780 9960

________________________________
From: Devon Archer [mailto:[email-masked]]
Sent: Friday, April 29, 2011 7:17 PM
To: 侯文齡(Juliana Hou )
Cc: Hunter Biden; 蕭仲謀(香港); 謝載祥(Winston Hsia); 江偉平(Webster Kiang)
Subject: Re: RREAF follow-up
Importance: High

Juliana,
Thank you kindly for your thoughtful reply.  We will stand by patiently on the real estate side and update you on our progress as we develop our portfolio in RREAF.  I am certain as you track our progress the offering will become overwhelmingly compelling from a a risk adjusted return for your profile, and you will reconsider at that time.

That being said, I run the private equity and merchant banking divisions at Rosemont.  I would be very happy to start exchanging information and dealflow.  We are very active in the market of energy, technology, services, media and telecom, consumer and other in both the United States and emerging markets around the world.  Our current 2007 vintage PE Fund is marked in the top decile of private equity managers according to Cambridge Associates Dec. 31, 2010 review.

If we are going to be effective in collaborating I need to ask that you send me a more specific profile of what type of dealflow you are interested in and where you are interested in playing in the capital structure.  It would helpful if you could review the following.  As it relates to PE; is Chinatrust interested in:

 *   Funds level investments?
 *   Direct control investments?
 *   Direct co-Investments?
 *   Secondaries; funds or direct?
 *   Equity?
 *   Debt?
 *   Equity & debt?
 *   What sectors?
 *   What geographies?
 *   What is the investment time horizon?
 *   What stage (ie, venture (early/late), growth, LBO, sunset, special situations, etc.)?
 *   What is the duration for investment decisions for Chinatrust (ie, from initial screen to funding)?
Additionally, it is important that we understand what group w/n Chinatrust your interest in PE is generated from, what are the sources of capital, who are the decision makers and what is their process and timing for decision making.  Additionally any other information that can help target our thinking will be useful in helping us develop a long, productive and fruitful relationship.

I will forward you some examples of recent PE investment memo's we have prepared that describe assets that we have made PE investments, under separate cover, to give a little insight into our portfolio and our more recent transactions.

All the Best,
Devon

From: "侯文齡 (Juliana Hou )" <<mailto:[email-masked]>[email-masked]<mailto:[email-masked]>>
Date: Fri, 29 Apr 2011 06:39:49 -0400
To: Devon Archer <<mailto:[email-masked]>[email-masked]<mailto:[email-masked]>>
Cc: Hunter Biden <<mailto:[email-masked]>[email-masked]<mailto:[email-masked]>>, "C.M. Hsiao" <<mailto:[email-masked]>[email-masked]<mailto:[email-masked]>>, "謝載祥 (Winston Hsia)" <<mailto:[email-masked]>[email-masked]<mailto:[email-masked]>>, "江偉平 (Webster Kiang)" <<mailto:[email-masked]>[email-masked]<mailto:[email-masked]>>
Subject: RE: RREAF follow-up

Hi, Devon,

Thank you very much for sending the material again to me. It was my pleasure to meet you in Taiwan.  Meanwhile, please accept my apology that it took a somewhat longer time for us to get back to you.

Subsequent to the meeting, we have internally reviewed our investment plans and where we like the resources to be placed. However, we feel the real estate markets may not bewhat we like to pursuit eagerly at this moment. Chinatrust has been a bank precautious about the real estate markets with its homeland, Taiwan, included.

In spite of our less aggressive intension towards real estate, we would very much like to explore with you on other fronts, namely investments in industrial and other commercial sectors. I will pass the contact information of Mr. James Bulger and Ms. Caryn Suffredini to Mr. CM Hsiao (who is also copied in this email, a managing director-principal investment division currently resides in Beijin) for future contacts. Please do let me know if there is any thing I can be of assistance.  I sincerely hope we will be building a mutually beneficial relationship.

Best regards,

Juliana

Juliana Hou
SVP, Principal Investment Division
Chinatrust Commercial Bank
No.3, Sung Shou Road, Taipei 110, Taiwan
Tel: +886 2 2722 2002 ext 1225
Fax:+886 2 8780 9960

________________________________
From: Devon Archer [<mailto:[email-masked]>mailto:[email-masked]]
Sent: Thursday, April 28, 2011 8:59 PM
To: 侯文齡(Juliana Hou )
Cc: Hermes Chang
Subject: RREAF follow-up
Importance: High

Juliana,
Thank you kindly for your time this past week in Taipei.  I look forward to an opportunity to partner with Chinatrust in the future.  I know Hermes has been coordinating with you and your team but let me know if you need anything in the meantime.  I've attached a soft copy of the RREAF program for your reference.  Thank you!
All the Best,
Devon

Devon Archer
Rosemont Capital, LLC
401 Greenwich Street, Suite 400
New York, NY 10013
o: 212 933 9965
f: 212 933 9964
m: 646 436 3745
www.rosemontrealty.com<http://www.rosemontrealty.com>

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