Zephyr targets $60m Sri Lanka fund

The firm is provisionally targeting a first close by the end of June and a final close in September, according to a source familiar with the situation. Sectors of interest include high-value textile exports, agribusiness, tourism infrastructure, logistics and business process outsourcing.

Development finance institutions (DFIs), which feature prominently in Zephyr's other funds, are expected to account for the bulk of the Sri Lanka vehicle's corpus. The firm also has a relationship with National Development Bank, Sri Lanka's largest investment bank, and it is likely to invest in the fund from its balance sheet.

"We have looked at Myanmar, Indonesia and Vietnam," the source said. "It has to be a combination of the right partners and the right team. As part of the process, we were looking at Sri Lanka, not necessarily as an extension to the India team but the proximity to Bangalore - it's a one-hour flight - was certainly helpful. It would allow us to manage the business more easily."

Zephyr Peacock India reached a second - and as it turned out final - close on its third fund last year at $70 million, short of the $150 million target. The vehicle is now one quarter deployed.

Zephyr was set up in 1994 and has sponsored 22 funds with approximately $1.2 billion in committed capital. It has offices in New York, London and Bangalore, and funds covering Africa, Mexico and Korea in addition to India.

Several private equity firms have tried and failed to launch Sri Lanka funds, including Leopard Capital and Calamander Capital. There is also one domestic player - Jupiter Capital Partners - currently in the market. Jupiter increased its target from $50 million to $100 million, with the option of closing at $75 million.

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• Topics
• Fundraising
• South Asia
• Sri Lanka
• India
• Zephyr Peacock Management
• Fundraising