NDB Zephyr Partners floats $50M Sri Lanka-focused PE fund

New York-based global emerging market private equity firm Zephyr Management and Colombo-based investment bank NDB Capital Holdings Plc have floated a $50 million private equity fund focused on Sri Lanka, as per a statement.

The fund called Emerald Sri Lanka Fund will be managed by NDB Zephyr Partners, which is owned by Zephyr Management LP and NDB Capital Holdings PLC, a subsidiary of Sri Lanka's National Development Bank.

The fund will make investments in the range of $2 million to $6 million in fast-growing small and medium-sized enterprises in Sri Lanka for a significant minority stake, and will be the largest PE fund focused solely for investments in Sri Lanka, the statement said.

“NDB is pleased to take a leadership role in the launch of this Sri Lanka dedicated private equity fund. We believe that the launch of the Emerald Fund will help facilitate the emergence of a new industry that will serve many Sri Lankan companies in the years to come,” Rajendra Theagarajah, CEO of NDB Group, said.

NDB Zephyr will assist its portfolio companies in areas such as strategic planning, management development, financial management, corporate governance and operational efficiencies.

The investors for the fund include FMO (the Netherlands Development Finance Company), DEG- Deutsche Investitions- und Entwicklungsgesellschaft mbH and IFC, the private sector lending arm of the World Bank.

IFC is proposing an equity investment of up to $10 million.

“IFC is excited about our partnership with NDB and Zephyr. It puts us at the forefront of developing the private equity ecosystem in Sri Lanka,” said Atul Mehta, IFC Global Director for Telecom, Media, Technology, Private Equity Funds and Venture Investing.

“We are excited about our participation in the first institutional private equity fund in Sri Lanka. NDB’s strong reputation and experience in the Sri Lanka capital markets will provide the Fund’s investment team with much needed local experience, knowledge and relationships',” Thomas Barry, founder and CEO of Zephyr Management, said in the statement.

Emerald Sri Lanka Fund will have two managing directors, NDB Capital's Senaka Kakiriwaragodage and Zephyr Management's Karthik Bhat.

Prior to his new role, Senaka was vice president and head of capital markets at NDB Investment Bank (NDBIB) and has 10 years of investment banking experience at NDBIB. On the other side, Bhat is vice president and a member of the Zephyr Peacock (Zephyr management L.P’s India Funds) Investment team.

(Edited by Joby Puthuparampil Johnson)

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