Silk Road expects three Myanmar deals by year end

Alisher Ali, managing partner at the private equity firm, told Bloomberg that the fund would target knowledge-driven industries such as the internet, information technology, education and healthcare. "Myanmar's gross domestic product may easily double within five years," he said. "And the industries we decided to focus on are going to triple in the same period."

With the Myanmar government having pledged political and economic reforms, the IMF said in September that foreign direct investment (FDI) in the country is likely to rise 40% to a record $3.99 billion this year. It projects GDP growth of 5.5-6% for 2012, up from 3.6% in 2008. The parallel market exchange rate of the kyat has also appreciated in nominal effective terms, primarily due to large FDI inflows.

Silk Road Management is the investment subsidiary of frontier markets-focused Silk Road Finance, which set up a Myanmar subsidiary earlier this year. The new entity, known as Mandalay Capital, is modeled on Eurasia Capital, Silk Road's Mongolia investment banking arm.

In April 2011, Silk Road raised $30 million for its debut Mongolia vehicle - the Mongolia Human Capital Fund - exceeding the original target of $25 million. Capital came from family offices and high net worth individuals from Asia, the Middle East, Kazakhstan and Russia.

Several private equity firms have announced plans to raise Mynamar funds as the resource-rich country gradually becomes more globally integrated.

Country-specific vehicles are in the pipeline from Leopard Capital, Bagan Capital and Link Road Capital Management. Cube Capital may commit one third of its current $200 million fund in Myanmar, while a $250 million joint venture vehicle between Dragon Capital and Frontier Investment & Development Partners is likely to include the country in its regional portfolio.

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• Topics
• Southeast Asia
• Expansion
• Myanmar
• Silk Road Management
• Growth capital