The anchor investors in the Ascent Myanmar Growth Fund I (AMGF) are U Aung Moe Kyaw, founder of Myanmar Distillery Co (MDC), which owns the Grand Royal whiskey brand, and Singapore businessman Tony Chew, who is co-founder of MDC and has been an investor in Myanmar for over 20 years.

Other key investors include Singapore sovereign wealth fund Temasek, the Asian Development Bank (ADB) and JG Summit Holdings, one of the largest conglomerates in the Phillippines.

AMGF will invest in a significant minority or majority stake in brown-field firms with potential for growth in the targeted sectors, Lim Chong Chong, founder and managing partner of Ascent Capital Partners, told The Myanmar Times.

“These firms will be market leaders or have the potential to be market leaders in the future. We aim to take the companies to the next level of growth such as launching new products or services or expansion,” Mr Lim said.

AMGF will deploy a long term strategy, with aims to stay invested in its portfolio of selected firms for up to 14 years. The fund’s managers will target a seat on the board of directors and be involved in the active management over the companies’ growth and operational plans.

AMGF has a target capitalisation of US$100 million and intends to make 10 to 15 investments of US$5 million to US$10 million in each firm.

The fund announced its first close in October 2018 and its second close in December 2018, during which the ADB invested US$10 million.

The fund now has “way above the minimum threshold of $50 million in assets under management,” said Mr Lim.

The aim is to exit the investments via initial public offerings in Thailand, Singapore or Myanmar or cash out via sales back to the owners after the holding period.

Investors can expect a return of “more than 20 percent over the investment period,” Mr Lim said.

AMGF is investing in Myanmar at a time when business confidence and foreign direct investments are falling. Meanwhile, the government has come under pressure to accelerate the pace of economic reform, such as liberalising the capital markets.

Mr Lim, who has worked in Myanmar since 2013, has a different view though. “We have a 14-year time horizon, so, our perspective is long term,” he said.

“When we look at Myanmar in 2019, we are not comparing it to Thailand or Vietnam. We are comparing the economy now to 2013 and there have been big improvements in the regulatory space, banking and finance, capital markets and corporate governance,” Mr Lim said.

He added that it is now much easier to do business in the country compared to six years ago. “The cost of doing business is also much lower now. For example, office rentals have fallen substantially. With other investors holding back, there is also less competition for us at this point.”

“We are here for the long haul as we believe Myanmar will thrive over the next decade,” Mr Lim said.

Source: https://www.mmtimes.com/news/singapore-channels-private-equity-myanmar-growth-sectors.html