Dubai Group eyes Cambodia

Written by Post and Wire Services

Thursday, 25 September 2008 Courtesy of Phnom Penh Post

Cambodia's Leopard Group could manage investment from the UAE-based fund, with sights set on energy, agriculture and property development Heng Chivoan Cambodians harvesting rice; the Kingdom’s agro-industry sector is attracting increasing amounts of foreign investment. DUBAI Group, an investment company managing more than US$40 billion on behalf of the emirate's ruler, said it may invest in Leopard Capital's Cambodia fund, the group's first investment in the Kingdom. "We are interested in Cambodia,'' said Lim See Teik, a senior private-equity analyst at Dubai Investment Group, the asset management unit. "There seems to be a lot of potential.'' The prospect of oil and gas development and political stability are luring foreign investments in Cambodia. The Cambodian economy grew 9.5 percent a year from 2000 to 2007, the fastest pace in Asia after China. An official at the Finance Ministry said he had no details on the investment. "I am unaware of the news, but if it materialises, we are pleased to welcome the investment," Hang Chuon Naron, a secretary general at the ministry, told the Post Wednesday. Dubai Group has invested in other Southeast Asian countries, except for military-ruled Myanmar, Lim said. The group bought a 30 percent stake in Malaysian bio-diesel company GBD Investment Ltd for $49.5 million in April. "Cambodia is probably the missing link in the jigsaw,'' Lim added, declining to say how much Dubai Group will invest. Cambodia ranked 166th among 180 countries in Berlin-based Transparency International's 2008 survey of perceptions about corruption. Myanmar was the most corrupt. 'Opportunities' Dubai Group, which includes seven units with interests in asset management, conventional and Islamic banking, private equity and insurance, was set up as part of Sheikh Mohammed Bin Rashid Al-Maktoum's plan to diversify Dubai's economy. Leopard Capital has invested in a housing project in Siem Reap. The fund has identified potential investments in agriculture, commodities processing, a fast-food restaurant, banks, power plants and hotels, promising returns of about 25 percent a year, Chief Executive Officer Douglas Clayton said. Earlier investments will offer much higher returns, he added. "There is no shortage of opportunities,'' Clayton said. "Here, there are too many deals and not enough money; the country's changed faster than the perception has changed." Leopard Capital told Bloomberg News it is taking longer than expected to raise the targeted $100 million amid the global financial turmoil. The fund has raised $12.6 million and is set to attract additional commitments following meetings with investors from 17 countries in Phnom Penh last week Clayton, said. Tougher environment "The fundraising environment for everyone is a bit tougher right now given the Western banking crisis, but there are still plenty of investors out there looking for safe havens of growth, and private equity in Cambodia is certainly one of the few in Asia,'' said Clayton. Cambodia's stock market, scheduled to open by the end of 2009, will have a capitalisation of as much as $2.5 billion in 2014, or about 20 percent of the nation's gross domestic product, said Ken Stevens, chief investment officer of Leopard Capital. Leopard Capital plans to cash out of most of its investments through share sales in the local market. "The key thing is the development of a capital market which has sufficient breadth and depth to allow exits from investments,'' Dubai Group's Lim said. "That would be a key concern for us,'' he said. No information on the investment was available on the Dubai Group's website, and a company spokeswoman would not confirm or deny Dubai Group's plans.