Ashmore looks to scale up in emerging markets

London-based Ashmore Investment Management is aiming to raise a new, “significantly larger” fund for investment in emerging markets just ten months after it closed its last vehicle on $1.3bn.

Ashmore Investment Management, a London Stock Exchange-listed fund manager, has launched its Global Special Situations Fund Five with the aim of raising more than the $1.4 billion and $1.3 billion it raised for its third and fourth funds respectively.

Ashmore chief executive Mark Coombs said in a statement: “The deal flow we are seeing is extremely strong and we would prefer this fund to be significantly larger than the previous two as we believe we have uses for the money over the same sort of time horizon.” A spokesman for Ashmore declined to confirm UK newspaper reports that at least $2.6 billion was being targeted.

The firm has been putting its money to work extremely fast in private equity and distressed debt. The third fund was fully drawn down in 11 months and the fourth fund is currently 70 percent drawn down, after closing in October 2007.

In the statement, Ashmore said its internal rate of return on all exited deals since its first dedicated fund in 1998 to the end of March 2008 was “in excess of 38 percent annualised, gross of fees”. This result has been achieved, it said, “without using substantial leverage”.

As well as special situations, comprising private equity and distressed debt, Ashmore’s emerging markets-focussed strategy also encompasses US dollar-denominated debt, local currency-denominated debt, public equities and corporate high yield.