Sri Lanka’s growth potential results in launch of Opportunity Fund to help fund high growth companies
Sri Lanka’s improving relations with China and India along with the country’s geographic location has reportedly resulted in the setting up of a new US$ 50 million Sri Lanka Opportunity Fund (SOF) aimed at funding high growth companies.
According to reports, the promoters of SOF are VinaCapital, one of Vietnam’s leading investment management and real estate development firms with over US$ 1.8 billion in assets under management and Ataraxia Capital Partners, an investment management firm with over seven years of expertise in Asian and frontier markets, co-founded by Asanth Sebastian and Sharad Sri.
Local media reports stated that the Fund is set up via a joint venture, the SOF is a Singapore-registered fund and aims to invest in high-growth and well-managed Lankan companies as well as high potential start-ups.
The fund is reportedly modelled on VinaCapital’s flagship the VinaCapital Vietnam Opportunity Fund, which trades on the London Stock Exchange’s main board under the symbol ‘VOF’ and has a net asset value in excess of US$ 1 billion.
It is consistently ranked as one of the top Vietnam-focused funds in the world.
The partnership between VinaCapital and Ataraxia Capital Partners is a co-manager relationship under which VinaCapital provides their international expertise investing in frontier markets and Ataraxia Capital provides on-the-ground expertise, given their local investment experience across multiple sectors in Sri Lanka.
VinaCapital’s Singaporean subsidiary VCG Partners CEO Jason Ng has told Daily FT that Sri Lanka has great potential for growth especially given the expanding ties with China, India, Singapore and others.
“Sri Lanka is going through an important growth and transition period driven by its strategic location, a rapidly growing domestic middle class, pro-growth policies and an accelerating infrastructure build-up,” Jason has said. “We see Sri Lanka to be on a similar trajectory to Vietnam when VinaCapital first invested there in 2003,” he has added.
According to Jason, Sri Lanka has the potential to grow better than Vietnam or even follow the latter’s economic model to achieve better success. “Sri Lanka’s prospects are greater if it plays to its strength.”
Companies engaged in high growth or potential sectors such as tourism, FMCGs and distribution, healthcare and education could look for investments through the Sri Lanka Opportunity Fund. The Fund could help the growth of public as well as private sector business entities that would aid the overall growth of Sri Lanka’s economy.
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