Wednesday Mar 11, 2026
Wednesday Mar 11, 2026
Wednesday, 11 March 2026 02:32 - - {{hitsCtrl.values.hits}}
By Divya Thotawatte
Marking a significant step in reconnecting local capital markets with international investors, ACP Asset Management recently launched the first Sri Lanka-specific UCITS Fund offering global investors regulated access to the country’s equities and fixed income.
The launch was held 25 February at Cinnamon Life at City of Dreams where ACP announced that the fund has already been seeded with $ 10 million, with a further $ 25 million in inflows expected within 30 days.
The event was attended by a delegation from German-speaking Europe, highlighting a renewed investor interest in Sri Lanka. It was also attended by Deputy Minister of Industries and Entrepreneurship Development Chathuranga Abeysinghe, representatives from the Securities and Exchange Commission of Sri Lanka and the Colombo Stock Exchange, Colombo Port City Economic Commission Chairman and Director General, and other capital market intermediaries.
Addressing the gathering, Deputy Minister Abeysinghe said, “Sri Lanka has gone through many difficulties, but as a country we have been resilient, we have risen up in all the challenges… this is another significant milestone that we see from the government perspective.”
Over the past year and a half, the administration’s priority had been macroeconomic stabilisation under an IMF-supported framework, he said, noting that the macroeconomic conditions have now improved. Abeysinghe explained that a disciplined program was now implemented and the economy had grown more predictable, with certain regulatory measures reinforcing fiscal discipline and making macroeconomic indicators stable and foreseeable.
He also spoke of legislative reforms aimed at strengthening the investment climate, including changes related to state-owned enterprises, public-private partnerships, and exchange controls, adding that the amendments were also being examined to allow the free flow of capital.
“This is the economy that you are looking at to put your money in or invest in the future… take part in this opportunity as a long-term partner, not from a perspective of short-term gains,” the Deputy Minister invited.
ACP representatives highlighted how, in this climate, the launch was a significant milestone in providing the global investment community structured access to Sri Lankan assets.
The design of Sri Lanka Opportunity Fund
ACP Asset Management CIO Asanth Sebastian presented the new UCITS structure, noting that it was the culmination of “a three-year journey.”
“For the investment fund itself, it’s like an open-ended mutual fund. But this is the first country-specific UCITS fund, providing international exposure, international investors with exposure and access to the Sri Lankan growth story.”
The fund carries an ISIN, allowing it to be booked by international investors globally, and provides daily liquidity and a daily net asset value. The minimum investment for the institutional tranche is $ 10,000, limited to professional investors, while a retail tranche is being considered for a later stage.
“The objective of the fund is to deliver long-term capital returns and outperform the MSCI Frontier Markets Index, which we have already done through our actively managed certificate over the last four to five years.”
Sebastian outlined the fund structure: investors subscribe to the fund and receive units on their bank accounts; ACP Quorum, as asset manager, instructs brokers on purchases and sales in line with UCITS regulations. The structure includes a European management company and custodian framework, ensuring compliance with UCITS rules.
“Given the liquidity of the Sri Lankan capital markets… 30% of the assets of the fund have to be in fixed income or cash-like instruments.” The remainder will be invested in Sri Lankan equities, companies listed on other exchanges with operations in Sri Lanka, sovereign eurobonds and liquid treasury instruments.
The fund builds on ACP’s actively managed certificate launched in December 2021.
According to Sebastian, during the crisis period, the Colombo Stock Exchange All Share Price Index had fallen by about 50% in US dollar terms. Meanwhile ACP’s strategy had experienced a smaller drawdown of approximately 38%, and since inception had delivered about 65% in dollar terms.
He said that the fund provided “a regulated gateway for global capital into Sri Lanka,” offering higher international visibility for Sri Lankan companies and the government bond market and the potential to attract new funds through market cycles of the country.
The fund will target investors in Europe, particularly Germany and the Nordics, as well as Australia, New Zealand, the UAE and GCC markets, private banking and wealth management hubs in Singapore and Bangkok, and the Sri Lankan diaspora.
Reform momentum and market upside
A panel discussion following the launch of the fund also brought together policymakers, market intermediaries, and European investors to assess growth prospects and capital reforms for the country. The panel featured the Deputy Minister of Industries and Entrepreneurship Development Chathuranga Abeysinghe, Bartleet Religare Securities Director Angelo Ranasinghe, CAIAC Fund Management Executive Management Board Member Raimond Schuster, EM Value Chairman Alpay Ece, and Corum Asset Management Zurich Managing Director Stefan Bucher, moderated by Daily FT Editor and CEO Nisthar Cassim.
The Deputy Minister said the “platform is set” for expansion, noting that the 2026 Budget was most focused on growth with capital investments close to Rs. 1.2 trillion and a further Rs. 500 billion expected to be invested into the economy. He spoke of the long-delayed trade policy reforms, SME-focused soft loan schemes, and the restart of stalled infrastructure projects, noting that the government expected over 5% growth this year and export growth of around 10%.
He also stressed structural reforms, stating that if state-owned enterprises required new capital, the only option available would be the stock market.
From a regulatory standpoint, Schuster, involved in structuring the UCITS vehicle, said the key challenge was ensuring that the fund was fully compliant with the European law under the UCITS directive, enabling distribution across all European markets “just by notifying,” giving it access to a broad retail and institutional investor base.
Ranasinghe said, “The foreign participation has been moderate. But we have seen in the recent past very positive enquiries coming from the foreign investors.” This was supported by “strong, healthy corporate earnings” and improved liquidity, he said, highlighting banking stocks trading at attractive valuations, alongside opportunities in finance, food and beverage, construction and tourism.
European investors Ece and Bucher also spoke on their long-term involvement in Sri Lanka’s markets. Ece said the original attraction was that a lot of value stocks had been cheap. He explained that after launching their strategy with ACP in 2021, “after four years, we had 65%.” Bucher emphasised stability and trust, saying it “is very important when you invest… that the people are stable and that you can count on them.”
Pix by Ruwan Walpola
