
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.
STRATEGY SUMMARY & TERMS
- Emerald Fund seeks to invest in fast growing Small and Medium Enterprises (SMEs) in Sri Lanka, that are led by promising entrepreneurs and strong management teams
- The Fund focuses on emerging businesses with significant scope for growth comprising of revenue growth and margin expansion
- The emphasis is on value addition subsequent to the Fund’s investment. Areas of value addition include strategic planning, governance, management development, financial management and operational efficiencies
TARGETED BUSINESS SECTORS & DEAL SOURCES
- Target sectors for the Fund include healthcare, financial services, value added exports, leisure/entertainment, IT, logistics/port related services, consumer goods, infrastructure and construction
- The Fund also targets export oriented sectors where Sri Lankan businesses enjoy natural competitive advantage due to factors such as access to raw materials, low operating-cost structure, attractive geographical location and highly experienced workforce
- The team sources potential deals via proprietary research, intermediaries and the team’s networks
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.
The Partners
Zephyr Management, L.P. is a global private equity and marketable securities firm. Founded in 1994, the firm specializes in the creation and management of highly focused and value added investment funds. Since its founding, Zephyr has sponsored twenty two investment funds across the developed and developing world and is actively researching new investment opportunities around the world.
Visit Zephyr’s website: www.zmlp.com
NDB Capital Group holds a complementary business portfolio of fee-based investment banking, wealth management and stock broking, and fund-based activities such as proprietary debt and equity trading and underwriting. NDB Capital’s fee-based investment banking and wealth management businesses are market leaders in Sri Lanka. NDB Capital is a subsidiary of National Development Bank PLC.
Link to NDB website: www.ndbch.com
Emerald Sri Lanka Fund
NDB Zephyr Partners Lanka (Pvt) Limited
No. 48/5/1 (West Wing), Parkway Building, Park Street
Colombo 02, Sri Lanka
Tel: +94 11 2303810 – 12 | Fax: +0112-307155