Thursday, May 15, 2008
Cambodia draws interest of private equity
By Netty Ismail, Bloomberg
SINGA****E -- Private-equity investors are venturing into Cambodia, as
the nation that three decades ago abolished money under the Khmer
Rouge seeks more than US$6 billion to rebuild itself.
Leopard Capital and Cambodia Investment & Development Fund are among
those planning to put more than US$450 million in the second-poorest
of 10 Southeast Asian nations. Cambodia Investment is getting advice
from Jim Rogers, who predicted the start of the commodities boom in
1999, and Marc Faber, who forecast Asian assets would decline before
the regional financial crisis in 1997.
"It's a country that's changed a lot and investors are finally waking
up to that," said Douglas Clayton, founder of Leopard Capital, who is
based in Phnom Penh and is seeking to raise US$100 million. "Most
people have an outdated perception of Cambodia; clearly the country
has made significant progress."
Prime Minister Hun Sen is relying on the country's oil and mineral
resources to attract foreign investments and reduce Cambodia's
dependence on clothing ex****ts and tourism for growth as he prepares
for an election in July. The funds will move money into banks, office
buildings, luxury hotels, ****ts and other projects.
"Cambodia does have a lot of natural resources, it does have an
ambitious population, and it does have some assets," said Singa****e-
based Rogers, who co-founded the Quantum hedge fund with George Soros
during the 1970s, and is now chairman of Rogers Holdings. "Most
countries that come out of something like they have are inclined to be
pretty safe for a while because they're trying to get money in."
Leopard Capital's first planned investment, a housing project in Siem
Reap, probably will generate a return of more than 60 percent a year,
about three times the internal target for private-equity investments,
said Clayton, who moved to Phnom Penh from Bangkok last June.
Clayton was a hedge fund manager at Knight Asia Group and head of CLSA
Securities in Thailand before setting up Leopard Capital in 2007.
Faber, publisher of the Gloom, Boom & Doom re****t, is a director at
Leopard Capital.
Peter Brimble and Bradley Gordon, Clayton's former partners at Leopard
Capital, are starting the US$100 million Cambodia Emerald fund this
year to invest in tourism, agriculture, financial institutions,
infrastructure and real estate.
The fund plans to close at least one deal before the end of the year,
said Brimble, who's based in Phnom Penh. LR Global Partners in New
York and London-based Kazimir Partners are investors in Cambodia
Emerald, he said.
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