‘The Ultimate Business-Cycle Bottom Fisher’

19 years later, in 1989, the group placed all six of its hotel properties into CDL Hotels: the aforementioned King’s Hotel, their first; Orchid Inn and Orchard Hotel in Singapore, the Grand Hyatt Taipei in Taiwan, the Manila Plaza Hotel in the Philippines, and Orchid Hotel Penang in Malaysia. The Kweks then listed CDL Hotels on the Hong Kong stock exchange with an initial market capitalisation of HK$3 billion. CDL maintained ownership of 51% of the company; with this listing it raised a war chest of about HK$1.47 billion (around US$188 million).

It is actually very clear that Kwek Leng Beng knew the game he played, and has thought carefully about how to play it. In an interview on the eve of M&C’s listing, all the way back in 1996, Kwek said: “My advantage (over other hoteliers) is that I am not only a hotel person, but also a real-estate person and a financial person.” The playbook that Kwek uses is fairly clear in retrospect. Buy properties at or below ‘true’ value, ideally from distressed sellers, acting counter-cyclically whenever possible. (It should be said that figuring out what ‘true’ value is is rather difficult, and demands that you have a good feel for the market). Make