Daiwa units form $30m Myanmar growth fund

Daiwa PI Partners (DPI) and Daiwa Corporate Investment (DCI) account for the bulk of the corpus, with Taiyo Life Insurance also contributing. The fund – known as Daiwa Myanmar Growth Fund – is intended to continue DPI's investment activity in the country, which began in mid-2017.

The key sectors are consumer and infrastructure. Demand for consumer goods and related services is expected to be driven by attractive demographics, rapid urbanization, the emerging middle class, and changes in lifestyle. Telecom and logistics are the key areas within infrastructure. Both are viewed as essential to rapid economic and social development.

The fund – which has a lifespan of 12 years and investment period of five years – will take significant minority stakes of 10-30% in portfolio companies as well as board seats.

"Since the new government took office in 2011, when the military government's control was over, Myanmar government has initiated a process of extensive political and economic structural reform. In recent years, the international community has witnessed many positive changes in Myanmar, especially the efforts to open up its economy to global market," DPI said in a statement.

It cited the introduction of new foreign investment and companies legislation, as well as the lifting of economic sanctions. "With the country's plentiful resources, geographical advantage and the input of foreign investment, Myanmar is now ready to pursue stronger economic growth with more international exposure," DPI added.

DPI was established in 1998 as a division of Daiwa SMBC Securities and initially made debt investments. It entered private equity in 2000 with Daiwa Securities SMBC Principal Investments established the following year. The firm's first overseas investment came in 2008. DPI was formed as a result of Daiwa ending its joint venture with Sumitomo Mitsui Financial Group.

Myanmar has seen a spike in fundraising activity in the past 12 months on the back of government liberalizations and improving confidence in overall economic growth. Last year, Delta Capital Myanmar achieved a final close of $70 million for its second fund, while Anthem Asia reached a first close of $34.5 million for a vehicle that focuses on SMEs. In January, Ascent Capital launched its debut fund with about $50 million in confirmed commitments.

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• Topics
• Southeast Asia
• Growth
• Fundraising
• Japan
• Myanmar
• Daiwa Securities SMBC Principal Investments