LankaBangla Asset Management Company Ltd (LBAMCL) launched the country’s first private equity (PE) fund, LankaBangla 1st PE Fund, on Thursday.
LankaBangla Securities Ltd (LBSL), one of the leading brokerage firm of the country, is the sponsor of the fund, Green Delta Insurance Company Ltd being its trustee.
The fund size is set at Tk 25 crore with a tenure of 10 years, said Masum Ali, the chief executive officer (CEO) at LBAMCL, at the ‘trust deed signing ceremony’, held in the capital.
This is the first private equity fund to be registered under the “Bangladesh Securities and Exchange Commission (Alternative Investment) Rules, 2015”.
Information, Technology, and IT-enabled services; pharmaceuticals; healthcare; agriculture; food; and light engineering are the sectors the LBAMCL’s PE fund aims to invest in.
Several prospective local private sector companies have been receiving equity investments from foreign PE funds, which has not been sufficient to meet their need for capital. These companies will now enjoy better access to capital, as the local fund is being made available, said Khandoker Saffat Reza, the LBSL CEO.
Alternative funds of this kind will also enable the investors to have a stake in a largely untapped PE market, Saffat commented.
Private equity funds usually raise money from eligible investors with the privately-held equities and equity-linked instruments at its focal point.
Typically, investments in PE funds leads to higher capital gain and dividend prospect as compared to traditional mutual funds.
Globally, PE fund is a popular investment vehicle with cumulative assets to the tune of $5.8 trillion.