China-based group FGI assessing next move after National Golf Management acquisitions

In the past eight months, Founders Group International has acquired 22 Grand Strand golf courses, a tee time call center, two golf package companies, a few popular golf- and tourism-related websites, a course membership program, well over 300 acres of undeveloped land, 200 lots and a fledgling 80-resident multifamily housing development, all at a self-estimated cost of more than $100 million.

It’s time for the local subsidiary of the Chinese financial management and investment company Yiqian Funding, with principal owners Dan Liu of China and New York immigration attorney Nick Dou, who is president of FGI, to take a breather from its spate of spending to assess its holdings and how to best manage them.

How long the breather lasts could depend simply on when the next good investment opportunity in the Myrtle Beach area is presented.

“We need time to digest. Right now we’re not looking for anything,” said Dou, who added that numerous real estate agents, developers and business owners in the area have been trying to meet with them. “… For now we just want to make our 20-golf-course business good.”

How much FGI ultimately spends on area businesses and property is still very much undecided.

“It depends on the project. If it’s good we can spend,” Dou said. “… Maybe $200 million, maybe $300 million, it depends on the project.” He said FGI is interested “in anything that is good.”

Golf holdings

Founders Group’s most recent purchase was its largest and most comprehensive. In a sale completed last week, it acquired nearly all of the assets of what was previously the Myrtle Beach area’s largest golf course ownership and management company, National Golf Management.

Included in the sale were 12 courses, the Tee Time Central call center, the Ambassador Golf and Myrtle Beach Golf Trips golf package operations, the multi-course Prime Times membership program, and some of the Myrtle Beach area’s most visited golf-related websites including www.mbn.com, www.myrtlebeachgolftrips.com, www.myrtlebeachtrips.com and www.mbgolfinsider.com, which includes 30,000 reader reviews of Myrtle Beach courses.

“The next step is we just operate in the golf business,” Dou said. “With National we have a call center, marketing, we want to do the best. We want to bring more Chinese people here.”

Dou said Wednesday that FGI was not currently in serious discussions to purchase any more Strand courses, though he didn’t rule out buying more. “We don’t know yet. We’ll see. Who knows?” he said.

Dou said Founders Group might be interested in a project for at least one hotel that would support its other area businesses and properties, possibly joining forces with another company on a new hotel or hotel renovation project. “Probably, but it depends on the project,” Dou said. “Maybe we cooperate with somebody else, with a local business. We don’t know right now.”

FGI has retained executives from Classic Golf Group, which was operating the first three courses FGI purchased in September, and NGM to comprise its executive team.

Former Classic Golf Group general manager Rick Taylor and former NGM vice president of golf operations Scott Justman are regional managers, each essentially overseeing operations at about half of the company’s courses, former NGM vice president of marketing and sales Steve Mays is the company spokesman, and former NGM executive vice president of marketing and interactive services Jim Woodring is a marketing executive.

Dou said World Tour general manager Tom Plankers is his assistant, and former TPC Myrtle Beach controller Brian Kramer is the chief financial officer.

“Almost everybody stayed in the same position, but of course every company needs to reorganize their structure,” Dou said. “You hire people you can trust and rely on. I try to let everybody stay if they want to continue to work for Founders Group. We have a team. I want teamwork from everybody and a system.”

Taylor and Woodring are among the 14 board members of Myrtle Beach Golf Holiday, the marketing cooperative that has promoted Strand golf regionally, nationally and internationally since the 1960s, and FGI inherited Golf Holiday membership for all of its courses but Colonial Charters Golf Club. Dou has also been invited to board meetings.

But considering Founders Group is already spending its own money to market Myrtle Beach in China, Dou said the cost of Golf Holiday membership may be too steep and he needs to assess the benefits of membership moving forward.

Golf Holiday altered its dues structure for 2015. Eighteen-hole courses now pay $20,000 per year and 27-hole facilities pay $21,500 for membership. Package providers and hotels retained the prior method of paying a $1.50 fee per package round booked in addition to a $3,000 annual fee.

“Why does everybody contribute the same? We own 22 golf courses. I think we pay too much – $20,000 per golf course,” Dou said. “If we get the benefit we’ll do that. We have marketing in China right now. I’m not quite sure right now. I need time to understand that. I need time to find out what’s going on with system and the market.”

Golf Holiday president Bill Golden said the organization has been discussing future membership with FGI.

Dou plans to move to the Grand Strand as early as August with his wife and child and said Liu may follow with his family. Liu was married in Myrtle Beach on Tuesday.

Dou and Liu are spending nearly two full months in Myrtle Beach during their current trip – aside from tourist excursions with the 60 or so China residents who came to the U.S. for 10 days for Liu’s wedding – compared to what had been trips capped at a week or two over the past year. “I need to spend more time here to take care of everything,” Dou said.

Other investments

Golf is only part of FGI’s business interest.

FGI’s undeveloped property includes 241 acres at Wild Wing Plantation, approximately 20 acres at TPC Myrtle Beach and what had previously been nine additional holes at International World Tour Golf Links that closed in June 2013, leaving the course with 18 holes.

Plankers said the nine holes – known as the International nine – may reopen, as he is conducting a feasibility cost study. “We’re waiting on getting numbers to see how much it’s going to take to reopen,” Plankers said.

Yiqian Funding, which Dou said has 5,000 to 6,000 employees, has created golf, tourism and real estate divisions in China to support its Myrtle Beach holdings, Dou said.

FGI will work on creating communities at the Stonewall Villas development in Longs, which will have up to 80 residences in two- and four-unit buildings, and on its 200 lots at Wild Wing. Dou believes FGI can sell many if not all of its lots and homes to Chinese nationals. “Our idea is running the golf business, travel agency business, to bring more people here from China so they will shop and buy a house and spend money here,” Dou said.

FGI believes it can use the story, pictures and video of Liu’s wedding, which included the ceremony at the old First Presbyterian Church, reception at Pine Lakes Country Club and evening party at Pawleys Plantation, to attract more investors and travelers to Myrtle Beach.

If FGI doesn’t invest in a business, property or project on the Strand in the near future, others from China might. Chinese individuals, families or businesses have already purchased another five courses, Waccamaw Pottery and more than 100 homes on the Strand in the past few years.

FGI investor Lily Xue of Nanjing, China is planning to bring 40 Chinese businessmen and entrepreneurs who are former classmates to Myrtle Beach in November to vacation and look at the beach’s offerings. Dou plans to also bring clients and friends, and Keller Williams Realtor Jane Zheng said she has five to 10 groups of other Chinese investors scheduled to visit the Strand this year to look at a myriad of properties for consideration.

Dou said a man from Nanjing saw Founders Group’s recent purchases and said he might return with up to $100 million to invest.

Can Myrtle Beach become a major vacation destination for Chinese? “They can go to New York, L.A., San Francisco, but Myrtle Beach is good because of lower taxes, good weather and golf courses,” Dou said. “Oceanfront golf courses, not every city can own that.”

While Myrtle Beach has its unique attributes, it also has its limitations for international travelers.

According to Dou, it doesn’t offer the modern five-star hotels, upscale stylish shopping options and authentic Chinese restaurants that many major cities offer.

“Some of my friends won’t come to Myrtle Beach because there are no good Chinese restaurants,” Dou said. “One friend from Beijing has 40 to 50 billion U.S. dollars and he can’t be here because there’s no real Chinese food. He likes fresh fish cooked in a Chinese way.”

But he believes Myrtle Beach has enough strengths, and FGI can contribute to strengthening its weaknesses, to make his investments successful.

“We think we can sell some houses to people from China, might get this money back, we might operate the golf courses and every year get revenue,” Dou said. “But right now we don’t know. Investing is a risk.”

This story was originally published May 2, 2015 at 5:41 PM with the headline "China-based group FGI assessing next move after National Golf Management acquisitions."