Ironwood launches Sri Lanka’s first post-war private equity fund with $ 30 m
Friday, 26 September 2014 00:19
Ironwood Capital Partners yesterday announced that it has successfully raised $ 30 million for the first dedicated private equity investment vehicle for Sri Lanka post-2009.
Ironwood aims to strengthen the national economy through key strategic investments and supporting the development of the private equity industry in the country.
Ironwood has assembled a global top tier team of professionals to manage these investments, including Steven Enderby (Non-Executive Chairman, Investment Committee) who has almost 20 years of global private equity experience with CDC and Actis, including several investments in Sri Lanka, along with Mayank Parekh (Non-Executive Member, Investment Committee) who is a former Head of McKinsey & Company in Singapore and a former General Partner of Southern Capital Group.
The two Managing Partners of the firm are Chanaka Wickramasuriya, a former Partner at Aureos Capital and Country Head of Fitch Ratings Sri Lanka, and Hiran Embuldeniya, who is a Director at York Street Partners and previously an investment banker at Goldman Sachs and a Management Consultant with McKinsey & Company.
The Ironwood team, supported by York Street Partners, a boutique investment bank in Sri Lanka, has raised $30 million primarily from offshore investors who want to participate in the growth story of Sri Lanka. The private equity fund will focus on making investments of $ 3-7 million in Small- and Medium-sized Enterprises (SMEs) across a range of sectors and stages of maturity.
Ironwood is the first-of-its-kind; a fund dedicated to the Sri Lankan economy since the end of the conflict in 2009. The Fund will give Sri Lankan firms access to much-needed capital for growth and expansion, as well as leverage managerial, operational, strategic knowhow and regional networks. It will also help strengthen corporate governance in these companies.
“This is a great vote of confidence for the Sri Lankan economy highlighting that Sri Lanka is an attractive investment destination for global investors” said Parekh. “The team on the ground, including Steven, Chanaka and Hiran, has a proven track record in private equity that is rare and remains the formula for investing successfully.”
Enderby commented: “Investments like these not only give investors potentially excellent returns but are crucial in strengthening Sri Lanka’s economy, supporting innovation and entrepreneurship, building locally-based regional platforms and creating hundreds, if not thousands of new jobs.”
“Through this fund we have the opportunity to work directly and closely with Sri Lankan entrepreneurs in addressing their needs and supporting their growth plans. Our team will spend a significant amount of time with investee companies to help improve performance,” said Embuldeniya.
Wickramasuriya further emphasised: “Establishing private equity as an asset class will reap long-term benefits for the companies, employees, investors and other stakeholders. In addition, it will become an important element of FDI for the country.”
The fund will look for investment opportunities aligned with the five hubs strategy of the country, whilst addressing some of the biggest challenges facing SMEs today including, access to finance, improved back-office functionality, improved governance, and access to top-tier human talent and mature business networks.
Ironwood also intends to be a socially responsible investor and will plan to adhere to the IFC Performance Standards on Social and Environmental Sustainability for its investee companies.