Emerging market-focused investment firm Zephyr is planning to raise $50m for its new private equity fund, which will target Sri Lanka.
Emerald Sri Lanka Fund I has already received support from the World Bank’s investment arm IFC, which has agreed to commit up to $10m to the vehicle.
The fund will target Sri Lankan SMEs seeking growth of expansion capital, planning to invest in between 10 and 12 businesses.
Jupiter Capital Partners said in a recent study that investors who are looking to profit from the expected growth of Sri Lanka’s economy need to increase their exposure to asset classes such as private equity.
It said that while Sri Lanka’s stock market is equivalent to 29 per cent of GDP and revenue of listed firms is equivalent to 25 per cent of GDP, Sri Lankan stock market performance has often moved in different direction from the real economy.
Jupiter added that the stock market is a weak hedge against inflation which makes a case for investing in other alternative assets to preserve wealth in the longer term.
Copyright © 2014 AltAssets