Emerald Sri Lanka Fund I (Emerald Fund) provides equity financing for fast growing, small to medium sized (SME) Sri Lankan companies led by strong entrepreneurs & management teams.
Investment Thesis & Strategy
NDB Zephyr Partners Limited (NDB Zephyr), launched the Emerald Fund to benefit from the untapped opportunity for growth capital in unlisted, entrepreneurially-led Small and Medium sized Enterprises in Sri Lanka.
Sri Lanka has a large number of small and medium sized businesses that are in need of expansion capital to benefit from strong economic fundamentals (i.e., strong GDP growth, growing domestic demand, etc.) and the improved operating environment in Sri Lanka today. The fund has already attracted commitments of USD 42.5 million from NDB Capital Holdings PLC, IFC, DEG, FMO, Zephyr and Dorset Limited.
NDB Zephyr’s investment philosophy will involve active participation in the management of investee companies to improve development and execution of company’s strategy and to generate superior returns through successful exits. To NDB Zephyr’s knowledge, the Fund will be the first private equity fund dedicated to Sri Lanka.
An important part of the Emerald Fund’s strategy is to secure significant rights in shareholder agreements (e.g., budgetary oversight, approval of appointments to key positions, ability to force an exit, etc.) and board representation. The investment team will actively monitor portfolio companies to help them implement their growth strategies. At least one member of the Emerald Investment Team typically will serve on the board of a portfolio company. Post-investment, the Manager expects to work actively with the management of its portfolio companies to enhance financial and organizational structures, business strategies and implement professional governance practices. Divestment is expected via strategic sale or a stock market listing on the Indian stock markets three to five years after investment.