Silk Road raises $30m for Mongolia

The firm exceeded its $25m fundraising target for investments in non-resources sectors in Mongolia.

Silk Road Management has raised $30 million for a Mongolia-focused fund targeting investments in non-resource sectors.

The Mongolia Human Capital Fund has collected commitments from family offices and high net worth individuals from Asia, the Middle East, Kazakhstan and Russia, according to a statement. The vehicle will invest in industries such as financial services, media, information technology, healthcare, education, and other human capital intensive industries, according to the statement. The fund’s original target was $25 million.

“We are committed to bringing capital to early stage, dynamically growing Mongolian companies and, at the same time, providing international investors with access to high growth sectors in Mongolia beyond mining and resources,” Alisher Ali, managing partner at Silk Road, said in the statement.

Based in Ulaanbaatar, Silk Road is an investment management firm focused on investments in various asset classes in Mongolia, including public equities, venture capital, private equity and property.

Other firms that have raised Mongolia-focused funds include Mongolia Opportunities Capital, a private equity firm managed by Singapore-based Frontier Investment and Development Partners. In June 2010, the firm announced it had started fundraising for Mongolia Opportunities Fund I, which is targeting $100 million. The fund has already secured commitments from The European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation.

Recent investments into Mongolia have come from Beijing-based Origo Partners, which made its fourth mining-related deal in the country last year by way of a $3 million commitment for a 25 percent stake in copper-gold prospect Bronze Fox. In 2009, Hopu Investment participated in a $110 million co-investment in Winsway Coking Coal Holdings, whose main business is the transporting of coal from Mongolia to China.

Hopu had previously invested in the country in 2008 with Singaporean sovereign wealth fund Temasek Holdings, pumping $300 million into Hong Kong-headquartered Lung Ming Investment Holdings (now called Iron Mining International), whose principal asset is the iron ore mine it owns in Mongolia.