The International Finance Corporation (IFC), the investment arm of the World Bank, is investing up to $7.5 million in Cambodia-Laos-Myanmar Development Fund II, L.P, a generalist private equity fund with a target size of $70 million.
IFC’s equity commitment is capped at 20 per cent of the total commitments in the fund, according to its investment disclosure.
The Fund will focus on investing in small and medium-sized enterprises in Cambodia, Laos and Myanmar.
The Fund will be managed by Singapore-headquartered Emerging Markets Investment Advisers Pte. Ltd, an independent private equity manager. The founding partners of the Fund are Trent Eddy and Joshua Morris.
IFC will also offer advisory suppot to Emerging Markets Investment Advisers particularly towards its expansion into Myanmar, a frontier market with limited precedent for risk capital. IFC will also support the fund manager in capacity-building requirements for potential investee firms and will help strengthen its back office operations.
IFC will take a seat on the fund’s advisory committee and will play an active role in ensuring adoption of fund management and governance best practices.
The investee companies are likely to be sustainable companies, which can get access to an alternative source of long term funding, stated in the announcement of IFC.
IFC’s involvement in the fund is expected to create sustainable companies in the Fund’s portfolio investments and provide them with access to an alternate source of long term funding. “Strong support by IFC, as a repeat investor, is expected to demonstrate IFC’s confidence in EMIA as a long term partner in Cambodia, Laos and Myanmar and help to deepen and establish Private Equity as an asset class,” according to the filing.
IFC has been fairly active in making both debt and equity investments in companies in Myanmar. It recently proposed extending a debt facility of $21 million to half a dozen microfinance entities in Myanmar. It has also committed investments towards Myanmar industrial port modernisation and retail group City Mart expansion, to name a few.