Capital market projects funded by ADB
We invest in private enterprise projects that strengthen the capital market in our developing member countries. Check out these case studies.
Liberty New World China Enterprises Investments, Limited Partnership (2000)
ADB approved in 2000 an equity investment of up to US$25 million in the Liberty New World China Enterprises Investments Limited Partnership. The fund is designed to help spur the growth of small and medium-sized enterprises in the People's Republic of China.
Features of the fund
- Sponsored by the New World Group (Hong Kong) and Liberty Financial Group (US). Managed by Newport Private Equity Asia, Inc (an affiliate of LFG).
- This fund will provide much-needed capital for private enterprise.
- Fund will invest in non-state manufacturing and service companies, especially SMEs
- Most investee companies will be located in Hubei, Jiangxi, Sichuan and Yunnan.
- Fund will assist companies by providing equity capital.
- Fund will provide companies with expertise in modern marketing, management, and governance.
- New World Group will match, dollar for dollar, all investments made by the fund in its investee companies.
- The target is to raise US$75 million for the fund at initial closing.
- ADB is helping structure the fund to ensure best corporate governance and management practices in the fund itself as well as in its investee companies.
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ADB investment: US$ 25 million equity
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Thai Recovery Fund (2000)
ADB approved an investment in the Thai Recovery Fund (formerly the Thai SME Investment and Restructuring Fund) which is dedicated to helping small and medium Thai businesses to recover from the effects of the Asian financial crisis. The fund will invest equity capital in selected companies, and help them to restructure.
Many intrinsically sound companies in Thailand now face severe financial difficulties. Most firms lack capital to expand or upgrade their operations. The situation is especially severe for small-and-medium sized enterprises (SMEs), who can rarely afford to use international investment banks or management consultants.
Objectives of the Fund
- Invest in financially strapped, but fundamentally viable SMEs.
- Mobilize financial assistance in form of equity capital.
- Generate reasonable risk-adjusted returns, and lower debt-to-equity ratios of SMEs.
- Restore investors' confidence in Thailand.
- Expedite corporate restructuring.
- Insist on compliance with ADB guidelines and local legislation concerning environmental and social policy.
- Develop a generic model of an SME investment fund that can be replicated in other crisis-affected countries.
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ADB investment: US$ 25 million (Equity)
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The Lombard Asian Private Investment Company Limited (1996)
From November 1996, ADB has participated in a regional equity investment fund, the Lombard Asian Private Investment Company Limited (LAPIC).
Features of the LAPIC fund
- ADB invested US$25 million in LAPIC and US$1 million in a related fund management company.
- A closed-end direct investment fund with a 10-year life, with a possibility of a two-year extension
- LAPIC has raised equity capital of US$252 million from ADB and the California Public Employees Retirement System (CalPERS) through Lombard Pacific Partners (LPP).
- Its eligible investments are equity, or equity-linked securities such as convertible bonds.
- Securities must be issued by companies undertaking industrial projects (mainly infrastructure) or financial services operating in ADB's developing member countries.
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See Also: LAPIC as a model of good governance
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Planters Development Bank (1986)
We are part owners of this well established bank since 1986, which focuses exclusively on small and medium enterprises (SMEs) in the Philippines. Planters Development Bank follows our own policy of supporting SMEs with funding and management advice. We regard this as an important strategy for strengthening the private sector in developing countries.
Small and medium enterprises stimulate economic development, particularly in rural areas, and thus help to reduce poverty. SMEs:
- account for 90% of business firms in the Philippines
- contribute about 25% to the country's gross national product
- employ roughly half of the labor force.
Features of the Planters Development Bank
- Dedicated to funding and supporting SMEs, with 40 years' experience.
- Can react rapidly to threats and opportunities.
- Adds value with specialist advisory services.
- Manages credit risks efficiently.
- Maintains a developmental perspective.
- Works closely with government agencies.
- Has won many awards for outstanding performance in SME finance.
- Has trained bankers from Asia, Africa, Middle East and Pacific Islands to deal with SMEs.
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Three foreign financial investors own about 40% of Plantersbank. They are ADB, Netherlands Development Finance Company and the International Finance Corporation.
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