Executive Exchange: 12 questions with Christopher Botsford
NAME: Christopher Botsford
TITLE: Founding Partner
COMPANY: ADM Capital
Christopher Botsford is a founding partner of ADM Capital, a member of the Executive Committee and a voting member of ADM Capital’s Investment Advisory Committee.
ADM Capital is a private credit specialist, with more than two decades of experience investing in developed and emerging Asia Pacific markets.
It pursues primarily secured direct lending and climate-focused credit in Asia-Pacific.
Prior to establishing ADM Capital in 1998, Botsford ran the Asia-Pacific regional debt and derivatives operation for Republic National Bank of New York.
He was also a founding board member in 1995 of the Asian arm of the International Swaps and Derivatives Association, the self-governing body for the derivatives industry.
In this Executive Exchange,Botsford talks about key inflences in his career, a lesson learnt from an investment that didnt work out and the personal qualities that have been instrumental in his career success.
If you could go back in time and invest in any company at its start-up phase, which would it be?
BYD. It’s big, it’s dynamic, it’s current, it’s one of the leading electric vehicle (EV) producers in the world.
Their commitment to innovation, sustainability and leadership in the EV market are truly remarkable and they fought the odds to get there.
Their growth from a small start-up to becoming a global leader in the highly competitive EV space in just 20 years is a testament to their vision and execution, making them what I think is an ideal retrospective investment choice.
How do you balance investor demands with sustainable investment practices?
I’d actually turn this on its head and say I can’t understand how people can make investments without taking environmental and social risks into account.
At ADM Capital, we believe that investor demand, and sustainable investment practices, are not mutually exclusive but rather intertwined.
In emerging Asian markets, where many businesses are still developing their sustainability profiles, we see a unique opportunity to play an advisory role.
We engage with the small and medium-sized enterprises (SMEs) we finance, providing guidance and support to help the owners future-proof their business practices and enhance their sustainability performance.
Our goal is to improve their sustainability profile at exit compared to when we first invested in them.
This approach aligns with our fiduciary responsibility to both our investors and the planet.
We believe that by integrating ESG considerations into our investment decisions and actively engaging with our portfolio companies, we can create long-term value for our investors while contributing to a more sustainable future.
If you had to equate your investment strategy to a game, which would it be and why?
A 3D Sudoku. It's quite complicated, because you move one figure, and it moves it in three different dimensions.
It's a game of intricate patterns and strategic thinking, where you need to consider multiple elements and interconnections to find the right solution.
Just like in 3D Sudoku, investing in emerging markets requires a multi-faceted approach.
You need to consider the economic, political, regulatory and social factors at play, as well as the specific industry dynamics and company fundamentals.
It's about understanding the big picture and identifying the hidden connections that can lead to profitable opportunities.
There's a certain satisfaction in finding the right combination of factors, just like solving a complex 3D Sudoku puzzle.
What's the most valuable lesson you've learned from an investment that didn't pan out?
Avoid leverage. A close second is the importance of maintaining control. In emerging markets, where information can be scarce and regulations less stringent, it's crucial to have a firm grasp on the decision-making process.
Excessive leverage can quickly turn a promising investment into a gamble, leaving you vulnerable.
Learning to navigate these complexities and prioritising control is key because when the penny drops, it can disappear.
Describe a major pivot your company had to make in its strategy. What drove this change?
In 2008, we made a significant strategic shift from distressed debt investment to growth-focused private credit.
This pivot was driven by the changing market landscape and the emergence of new opportunities in the Asia Pacific region.
The global financial crisis had created a wave of distressed assets, but we recognised the potential for growth in the secured direct lending space given the lack of available traditional financing options for mid-market corporates.
It was also especially clear that there was work to be done on the ESG front with hugely unvalued risk that companies and investors were taking on by investing in heavily polluting industries.
This shift allowed us to capitalise on the region's increasing demand for private capital and positioned us well for long-term success in the evolving Asian investment landscape in an environmentally conscious role.
Which investment figure has been most influential to you throughout your career?
I’d have to say, my business partner, Robert Appleby. He’s the balancer to my exuberance.
His ability to see the big picture, consider diverse perspectives, and navigate emerging markets has always inspired me.
He brings a balanced perspective to our investment decisions, ensuring we don't get carried away by short-term trends or overlook critical details.
He asks the right questions and his experience and insights have been invaluable, particularly in Asia where much less data is available than in developed markets.
Robert has also gone on to build a very successful private equity business focused on global food and sustainable agriculture.
His favourite fruit is durian, which can be hard to find in London!
If a movie was made about your life as an investment executive, who would you want to play you and why?
I would choose Matthew McConaughey. His ability to portray characters who navigate challenging situations with both determination and a touch of humour aligns with the demands of this profession.
I believe he could capture the essence of my journey, highlighting the highs and lows, the triumphs and setbacks, and the constant pursuit of value creation.
While the idea of a movie about my life as an investment executive is an intriguing one, I think I would prefer a more documentary-style approach that captures my story and the evolution of Asia over 25 years.
We have been involved in some pretty groundbreaking transactions and a show that documents the complex realities of financing a satellite and taking collateral in space, for example, would be educational and entertaining for those in the industry.
Which emerging market do you see as the most promising for investment and why?
Asia, hands down. As a collective, it stands out as a particularly promising emerging market.
Many countries in the region are experiencing rapid economic growth.
The region’s strategic location and growing role in global trade make it a compelling investment destination, with opportunities ranging from technology and infrastructure to consumer goods and services.
For private credit, Asia represents only 7% of global assets allocation, yet Asia now accounts for almost 50% of global GDP PPP [purchasing poower parity] adjusted. This underscores the vast opportunity in this market.
What advice would you give to someone just starting their career in asset management?
My advice would be to incorporate ESG principles into every aspect of their thinking because the world is going to need it.
The world is changing rapidly, and sustainability is no longer a niche concern but a fundamental driver of long-term value creation.
Don't be afraid to venture outside your comfort zone, challenge conventional wisdom, and explore new investment opportunities.
The future of asset management lies in embracing innovation, adapting to changing market dynamics and contributing to a more sustainable future.
That’s why we have created the ADM Capital Private Credit Academy to train young professionals in sustainability-focused private lending, which the world is short of.
What innovation in asset management are you most excited about right now?
AI is a hot topic but for us, in private credit, I’d say tokenisation, particularly in the context of real assets.
The tokenisation of the alternative asset industry has the potential to revolutionise the way we invest by increasing accessibility and liquidity, enhancing efficiency, and streamlining processes.
It can democratise private market products, making them available to a wider range of investors, including retail investors.
While tokenisation is still in its early stages, we believe that some are already exploring its potential applications in private credit.
What is the most important leadership lesson you've learned while leading your organisation?
The most important leadership lesson I've learned is the importance of listening to all stakeholders before making decisions.
Understanding each other's perspectives, pressures, and motivations is crucial for making informed and effective decisions.
Leadership is not just about making decisions but about building consensus, fostering collaboration, and ensuring that everyone feels heard and valued.
By creating a culture of open communication and mutual respect, we can make decisions that are not only strategically sound but also aligned with the needs and aspirations of all stakeholders.
Beyond the numbers, what personal quality do you believe has contributed most to your success?
I believe that curiosity and open-mindedness have been key drivers for me. If you can be open-minded, you can find ways to solve hurdles.
A relentless curiosity (whilst frustrating for my colleagues at times!) allows me to constantly question assumptions, seek new perspectives, and explore uncharted territories.
This has fuelled my desire to learn, adapt, and stay ahead of the curve in the ever-evolving world of investment.
It has also fostered a collaborative team environment, where everyone is encouraged to share ideas, challenge conventional wisdom, and embrace new opportunities.
I believe that curiosity, coupled with integrity, lateral thinking, and a strong team, have been fundamental to our success as a firm.