Mongolia Opportunities Capital, a private equity firm focused on investments in Mongolia, has started fundraising for Mongolia Opportunities Fund I, its maiden fund.
The European Bank for Reconstruction and Development (EBRD) is considering a commitment of $10 million to the fund while the International Finance Corporation is looking to invest $7.5 million, Mandar Jayawant, managing director of Mongolia Opportunities Capital, told PEI Asia. The fund will also receive a $6 million commitment from a private Mongolian company which is working through its final approval, he added.
The firm is seeking a first close on between $30 million and $50 million in the coming months and is targeting a $100 million final close by August 2011, Jayawant said. It will start making investments once it reaches a first close.
Mongolia: Investment opportunity
It will make growth investments in Mongolia’s SME segment. According to Jayawant, Mongolia Opportunities Fund I will primarily focus on investments in mining services, supply chain and infrastructure associated with mining, and will opportunistically consider investments in financial services and agribusiness.
Mongolia Opportunities Capital is incorporated in Cayman Islands and has an office in Mongolia. The firm has an investment team of five, Jayawant said.
In an earlier manifestation, the fund was known as Mongolia Investment and Development Fund, a vehicle with a planned $250 million target which was due to be launched early last year and managed by Singapore-based Frontier Investment and Development Partners (FIDP). Jayawant, who is also a partner at FIDP, said that the fund had been transitioned to Mongolia Opportunities Capital and was no longer associated with Frontier, although he himself retains a role at the firm.
FIDP is currently in the market for the Cambodia Laos Investment and Development Fund, which is targeting commitments of between $150 million and $200 million, Marvin Yeo, a founding partner at FIDP, told PEI Asia. That fund is targeting a first close on between $30 million and $50 million within the next three months and a final close is expected within a year of the first close, Yeo said. The fund is focused on Cambodia and Laos, but it has room to invest up to 20 percent of the fund in the rest of Indochina, he added.
“The two funds are managed by separate fund managers that share the same marketing platform,” Yeo said. He added this was done to satisfy the anchor investors for the Mongolia Opportunities Fund to avoid any perceived conflict of interests.
Mongolia has seen interest from private equity firms in the past. Mongolia-based investment firm Asia Pacific Investment Partners is investing from a $25 million fund that closed in April 2008.
Eurasia Capital, another investment firm which has a base in Ulaanbaatar, initially planned a listed Mongolia investment vehicle in 2008, but it shelved its plans due to the economic downturn. The firm now plans to list a Mongolia-focused vehicle on the London Stock Exchange in 2010 to target private equity, pre-IPO and listed opportunities in the country.