ASIAONE BUSINESS, MARCH 2007
By Janice Wong - Mar 27, 2007 AsiaOne
Article Source: http://business.asiaone.com.sg/mymoney/nestegg/20070327_001.html
 Fund manager Moe Ibrahim speaks about his latest acquisition Bintan Lagoon Resort (BLR) with an enthusiasm so infectious that you feel like taking the next ferry out to experience the Indonesian island for yourself.
The 32-year-old holds multiple portfolios: Among them are his role as fund manager with Asian Debt Fund which buys sick undervalued companies, and as president-director of BLR, which the fund bought in October 2005.
"The golf courses and beaches there are clean and gorgeous. It is safe and quiet - no tout tries to sell you cheap silk and you experience quaint fishing villages and dolphins. Best of all, it is only 45 minutes away from Singapore."
When you express skepticism that this is not quite the Bintan you know when you visited two years ago, he tells you that your view is rather outdated.
His enthusiasm is not dampened by a recent lawsuit. The Business Times reported on March 26 that PT Bintan Lagoon Resort (BLR) and Gallant Venture are being sued by PT Raflesia Matrawisata. The dispute concerns ownership of 963,353 square metres of land on the northzern shore of Bintan Island, currently occupied by a portion of the Bintan Lagoon Resort.
Responding to this legal spat, Mr Ibrahim told AsiaOne that BLR is in possession of valid titles to all of its land and he expects that in the short, medium and long-terms, the case has "absolutely no impact on BLR".
BLR barely broke even when the fund paid an undisclosed sum to buy it over from investors SembCorp, Keppel Land, Seletar Investments, the Kintetsu Group of Japan and Salim, the Indonesian conglomerate. Debt funds seek investment opportunities involving the debt instrument of companies that posess strong fundamentals but a weak balance sheet.
Despite having no experience in the hospitality business, he is confident that the 473-room resort will realise its vast potential to be a leading tourist destination soon. That was why he made a case to for the fund to operate the resort rather than to resell it.
"I am not a hotelier. There was just very little downside taking over at that discounted price. BLR has problems but those can be fixed. Going forward, creating additional value takes time and dedication."
His new initiatives there include a slinky club, Silk, and an alfresco diner. So far, the numbers look promising. He said room occupancy has risen from an average of 38 per cent to 62 per cent, with revenue hitting a record high last year.
Next, he needs to tackle the issue of cost with the master developer who supplies electricity and staff housing, and to improve service standards.
"There has been a culture of excuse and inaction. Now we construct a system under which staff are encouraged to treat guests like royalty and to have an attitude of "Saya Bisa" or "I can" in Indonesian."
With the Integrated Resorts coming up, how does BLR fit in?
He replied without a pause: "The goal is not to compete with the IR but to complement them. Increased traffic in the region will make an idyllic nearby resort like Bintan all the more appealing."
You are inclined to trust in his judgment. After all, Mr Ibrahim has traded over US$5 billion face amount of distressed debt in Asia over the past seven years, winning such awards as the Best Distressed Debt Fund and the Best Singapore Hedge Fund in 2004. In 2005, he was bestowed the Best Distressed Fund by Asian Investor Magazine.
Posted to work in Singapore in 1999, he likes the country's business-friendly environment and sunshine, which allows him to pursue his passion in triathlon training all year round. He also married Singaporean Sylvia last year and become a permanent resident. They plan to raise a family here. Born in the US of Egyptian parentage, he has a degree in biology and started work as a research associate with an investment bank, much to the frustration of his father who wanted him to become a doctor. He has no regrets healing companies now instead of patients. "As a kid, I loved to take apart my toys, see how the insides worked and then fix them back. Now, I get to take apart distressed companies, examine their structures and make them better. Who wouldn't enjoy a job like that?"
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