A New York based asset management company set up a frontier office in Colombo with a commitment of US$ 20 million to be invested in a strategic investment unit which would be set up in the near future with the ability to bring in more foreign investments and encourage investments from the Diaspora, local institutional and retail investors. This unit would be listed on the Colombo Stock Exchange within the year.
Logan Rockefeller Global (LR Global), a fund management firm based in New York dedicated to frontier emerging markets, with offices in Bangladesh, Cambodia, Laos, Myanmar, Papua New Guinea, Singapore, Thailand and Vietnam, set up operations in Sri Lanka with a ten member team of investment professionals incorporated as LR Global Lanka Asset Management Company.
This asset management team would oversee operations of LR Global Lanka Strategic Investments Company, which is yet to be incorporated. No sooner it is incorporated, the parent firm in New York would infuse US$ 20 million within the next three months, Channa De Silva, Managing Director of LR Global Lanka Asset Management said.
These funds would be used to invest in listed and unlisted equity, with LR Global being bullish on companies in the energy, leisure, ports and construction sectors.
De Silva said the firm hoped to promote a fair number of initial public offerings and invest in a number of companies that could be listed on the Colombo Stock Exchange. He told The Island Financial Review that the firm wants to be the final round of financing for would-be listed companies.
"We want to start small and promote the fund gradually while delivering results," Principal, LR Global, Don LaGuardia said. He said it was too early to infuse US$ 100 million into Sri Lanka at the moment, as returns would not be attractive. LaGuardia wants the asset management firm to be the best in the country.
LR Global’s portfolio in Bangladesh is US$ 170 million, but its initial investment in 1997 was US$ 10 million. LaGuardia said Bangladesh’s 150 million population size, six percent GDP growth, high levels of remittances which amounted to 10 percent of GDP and low levels of debt presented exciting prospects for investment returns.
About 40 percent of LR Global’s investment portfolio is in Africa, 15 to 20 percent in Central Asia, 15 percent in South Asia
"We are not in Sri Lanka for the short term. We are looking at a time frame of about 10 years which we think is reasonable. There are several reasons why we are here in Sri Lanka. There is political stability, interest rates are low and remittances are high suggesting the Sri Lankans overseas could invest.
"We also expect that Sri Lanka’s GDP growth can only accelerate. We have grand plans for Sri Lanka. We hope to increase the frontier research team from 10 to 15 within the year, and list the strategic investment unit in the Colombo Stock Exchange," LaGuardia said.
He said the firm was not bullish on investing in blue chips, but would look at smaller counters with strong growth potential.
Another fund to attract Diaspora and more
LR Global’s Don LaGuardia said the New York based firm was formulating another investment vehicle that would bring in much more funds into Sri Lanka.
"We are planning another investment vehicle which would be launched within the year. Please do not ask me when, because capital markets are such it would be difficult to say. This investment vehicle would attract investors from the region and could bring in much more investments than what we have already envisioned for (LR Global Lanka Strategic Investments).
"We also plan on engaging with Sri Lanka’s Diaspora to convince them in investing in Sri Lanka," he said.
LaGuardia declined to elaborate further. "I do not want to say much because we want to stay ahead of the competition, but it would happen within six to 12 months."
source - www.island.lk
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