Emerging Markets Investment Advisers Pte Ltd (EMIA) has recently announced the final closing of its latest fund, the Cambodia-Laos-Myanmar Development Fund II (CLMDF II) at US$64 million.
EMIA is the investment arm of Emerging Markets Group Holding, a business consulting and investment firm. The fund will focus on investing in profitable operating businesses and greenfield opportunities with great potential.
Meanwhile, EMIA is also scouting for experienced strategic partners for co-investment opportunities where it seeks to take a 25 to 40 percent minority stake in businesses.
“We seek meaningful minority stakes, so 25 to 40 percent is probably the sweet spot. We want stakes where we have a role to play in governance,” said Trent Eddy, the Chief Investment Officer of EMIA.
EMIA has already made six investments in Cambodia, Laos, and Myanmar using its second vehicle, and is currently in active discussions with several companies for a longer term commitment in Myanmar which may require more than 10 years before reaping the benefits of its PE investment.
“We have a long-term view and we are in the view that a good market for PE investments will evolve over that time with like-minded PE players,” said Eddy.
However, EMIA has yet to reveal the number of companies from Myanmar that the second vehicle is looking at investing into.
“We can in principle invest in tickets up to about US$9 million but our target size for a first investment is usually in the range of US$4 to US$5 million,” said Eddy.
“However, if we see potential in the company that deserve a follow-on investment, we would prefer to close smaller deals in the US$1 to US$3 million range.”
This is in order to retain some capacity to join in the follow-on investments if the company performs well and requires more fund to sustain its growth.
So far, EMIA investment portfolio in Cambodia and Laos include Cambodia’s leading microfinance institution AMIK, premium quality rice producer BRICo, employee benefits program provider iCare Benefits, and Planet Online, an internet service provider in Laos.
One of the investors in EMIA is the International Finance Corporation (IFC) which is the private lending arm of the World Bank Group that contributed US$7.5 million for its CLMDF II which was set up in 2015.
According to Eddy, active discussions are also underway for possible exits in the future. Looking at the investment firm’s funding geographic history, Cambodia is the best-developed for exit out of the three countries.