By ELLEN SHENG
The Wall Street Journal
In the private equity world, Cambodia just isn't what it used to be.
At one point in early 2008, fund managers were expecting to raise as much as $500 million for investment in the country. Instead, interest from investors evaporated with the financial crisis, forcing several funds to shut down or scale back.
Frontier Investment and Development Partners, which once hoped to launch a $250 million Cambodia fund, is struggling to find seed investors. Another, Cambodia Emerald postponed fundraising for their planned $100 million fund last year.
In total, Cambodia funds raised only $23 million in 2008, the Centre for Asia Private Equity Research, or APER, says. So far this year they've raised $5.6 million.
In neighboring Vietnam, once one of Asia's hottest investments, investors have also lost interest. Last month Indochina Capital Vietnam Holdings -- a prominent fund that invested in both listed and private companies -- was liquidated.
More broadly, Vietnam focused managers have raised no funds this year, according to APER data, a stark drop from the $1.6 billion raised in 2007. Naturally, deal making has declined. Dealogic tallies $20 million worth of private-equity investments in the two markets so far this year -- less than a third of the investments made the first nine months of 2008.
For those still in the game, the fundraising drought presents an opportunity. With fewer competitors sniffing around for investments, terms are better for buyers.
Managers say being smaller has its benefits, since most opportunities are in startups anyway. The majority of businesses in Vietnam are less than 8 years old.
Expectations for deal sizes have certainly changed. Leopard Cambodia, which has raised $28.6 million out of a planned $100 million, is now targeting investments between $1 million and $2 million. It once expected deals to be between $5 million and $15 million.
Leopard is among those that's resumed fundraising efforts. Another, Mekong Capital, a Vietnam-focused private equity firm, is raising a $150 million fund, its fourth.
But they're certainly not getting the reception they once might have. Investors are showing an increased appetite for risk, but few are willing to extend themselves as far as Cambodia just yet.
Write to Ellen Sheng at ellen.sheng@dowjones.com
At one point in early 2008, fund managers were expecting to raise as much as $500 million for investment in the country. Instead, interest from investors evaporated with the financial crisis, forcing several funds to shut down or scale back.
Frontier Investment and Development Partners, which once hoped to launch a $250 million Cambodia fund, is struggling to find seed investors. Another, Cambodia Emerald postponed fundraising for their planned $100 million fund last year.
In total, Cambodia funds raised only $23 million in 2008, the Centre for Asia Private Equity Research, or APER, says. So far this year they've raised $5.6 million.
In neighboring Vietnam, once one of Asia's hottest investments, investors have also lost interest. Last month Indochina Capital Vietnam Holdings -- a prominent fund that invested in both listed and private companies -- was liquidated.
More broadly, Vietnam focused managers have raised no funds this year, according to APER data, a stark drop from the $1.6 billion raised in 2007. Naturally, deal making has declined. Dealogic tallies $20 million worth of private-equity investments in the two markets so far this year -- less than a third of the investments made the first nine months of 2008.
For those still in the game, the fundraising drought presents an opportunity. With fewer competitors sniffing around for investments, terms are better for buyers.
Managers say being smaller has its benefits, since most opportunities are in startups anyway. The majority of businesses in Vietnam are less than 8 years old.
Expectations for deal sizes have certainly changed. Leopard Cambodia, which has raised $28.6 million out of a planned $100 million, is now targeting investments between $1 million and $2 million. It once expected deals to be between $5 million and $15 million.
Leopard is among those that's resumed fundraising efforts. Another, Mekong Capital, a Vietnam-focused private equity firm, is raising a $150 million fund, its fourth.
But they're certainly not getting the reception they once might have. Investors are showing an increased appetite for risk, but few are willing to extend themselves as far as Cambodia just yet.
Write to Ellen Sheng at ellen.sheng@dowjones.com
7 comments:
Heed the warning: all foreign investors, please stay away from Cambodia. Don't do business with Cambodia. Take your investment and business elsewhere.
That is what corruption can do to the nation. Profits will evaporate into thin air.....LEARN Ah Hun Insane....ah Ronteas Banh...don't lie you mother fucker...
Take it back, it is not evaporated into thin air...it is evaporated into Ah Hun Pocket...
hes! hes! you think Cambodian people will die? According Akkak Decho kawang Makhak said Cambodian people grow two banana trees ,two papaya trees and two pine apple trees so how much it gain? So we are survive.
Oop ignorant? No I mean intelligence?
he manxen doesn't cuz his family already rich and can stay in vietyuon for life...poor kingaroogay logo sopjet. when the father playboy....the son then kingaroogay ahhahh!
1:27PM,
The fact is poor Khmer people, which account for 95% of the khmer population, don't have land to grow banana trees, papaya trees, and pine apple anymore since their land is taken over by the rich and the powerful people. Without aids money, only the few rich or powerful, which account for only 5% of the population will survive.
keep in mind that there are more to cambodia than you and i, really! please think smartly about it. cambodia deserves better now.
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