Rykadan chairman sees himself as a calculated risk taker

William Chan, chairman and chief executive of Rykadan Capital, is not a risk taker but rather a calculated risk taker in that he considers if the risk in the investment is worth taking and is manageable. Having participated in the gaming business in Macau prior to investing in Rykadan, Chan saw many people in casinos who blindly bet their money and ended in failure. Chan said he carefully manages every investment he makes.

What is your company’s business model?

We are different from developers even though we also buy sites and build developements. Developers usually focus on replenishment of their land bank. Our business model is similar to an investment fund where we pursue a high internal rate of return (IRR) on each project. We do not have much of a land bank, but we add value in each project and enhance IRR. We also invite foreign funds to co-invest into our projects.

What was your company’s debut project?

Rykadan Capital Tower in Kwun Tong was our debut project after we shifted from a fitting-out works contractor to property firm. We bought the industrial building and transformed it into a 25-storey office building with a gross floor area of 252,820 sq ft. Secured Capital Investment Management Japan, now part of PAG Pacific Alliance Group, is our partner. Our partner was surprised as this building achieved an IRR of more than 40 per cent as the economy picked up sharply after the Asian financial crisis. The company kept two floors and some car parking spaces for its own use and sold the rest of the building. We got a very good response. The official line is we sold out the rest in just a week, but buyers had committed to buy before the official launch date.

What made you shift the company’s focus from fitting-out works to property?