Silk Road pushes into Myanmar

The private equity firm's latest frontier market fund has raised $25m for investment in Myanmar.

Silk Road Management has made a first and final close on its latest vehicle targeting private equity and venture capital opportunities in Myanmar, according to a company statement. The firm says it is the first-ever private equity vehicle dedicated to the country.

The fund has reached its target size of $25 million, garnering commitments from a number of family offices and high net-worth individuals from Mongolia, Russia and other oil-rich states in the Caspian region, according to the statement.

Silk Road’s fund, the Myanmar Human Capital Fund, will target investments in “knowledge-driven industries”, for example, the internet, media and telecommunications, education, healthcare, as well as financial services. The fund will not invest in the oil and gas, mining or manufacturing sectors.

According to the firm, Myanmar has significant natural resources, 60 million people on the second largest land mass in Southeast Asia and “represents one of the world’s most attractive investment opportunities”.

In May, the US suspended trade sanctions that had prevented US citizens and businesses from investing in the country. The European Union has also lifted sanctions. Last week, Myanmar's parliament signed a law on foreign investment law designed to accelerate the flow of capital into the country. 

Alisher Ali, managing partner of Silk Road Management, said in the statement, “After 50 years of isolation, Myanmar is currently witnessing unprecedented transformation, with bold reforms initiated by the government.”

The launch of Silk Road’s Myanmar vehicle coincides with the announcement that the Coca Cola Company is planning its first product delivery to Myanmar in 60 years, becoming one of many US businesses eyeing opportunities there, according to the firm.

Other private equity firms poised to enter the country are Leopard Capital and Link Road Management as well as investment firm Cube Capital. All of these firms include real estate among the private equity opportunities.

Silk Road Management is a subsidiary of Silk Road Finance, an investment bank in Mongolia. The firm recently launched Silk Road M3 Fund to invest in public equities and fixed income in Myanmar, Mongolia and Mozambique, and also manages a $30 million private equity fund in Mongolia.