ADB Contributes to Investment Fund for SMEs in ASEAN, China

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Last updated at: (Beijing Time) Wednesday, April 16, 2003

ADB Contributes to Investment Fund for SMEs in ASEAN, China

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The Asia Development Bank (ADB) Tuesday approved a 15 million US dollars equity participation in a new private equity fund that provides capital for small and medium enterprises (SMEs) in the member countries of the Association of Southeast Asian Nations (ASEAN), and the People's Republic of China (PRC).

The ASEAN China Investment Fund seeks to capitalize on investment opportunities in privately-held SMEs, particularly those that can benefit from expanding regional trade and investment linkages, and global integration, the Manila-based ADB said in a statement.

Two-way trade between ASEAN and the PRC has expanded by an average of 15 percent per year since 1995. The recently created ASEAN-PRC Free Trade Area will promote further integration.

"Although increased regional cooperation generates opportunities for SMEs, many of them lack capital, management and corporate governance expertise, and the technical skills to fully capitalize on the opportunities," explained Peter Marro, an ADB investment official.

"The fund will assist well managed companies with attractive growth prospects by providing risk capital, especially those well positioned to take advantage of the increased regional integration."

The fund, designed as a fully commercial investment vehicle, aims to raise equity capital commitments totaling 125 million dollars through private placement of limited partner interests with investors.

This is the first ADB-assisted investment fund. Besides ADB, the fund's initial core limited partners include the State Secretariat of Economic Affairs of Switzerland, which will also invest up to 15 million dollars, and the United Overseas Bank Group of Singapore, which will invest up to 10 million dollars.

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