CDC Group, the UK’s development finance institution, has made a USD10m investment in the first private equity fund dedicated to Bangladesh.
CDC’s investment in the Frontier PE fund will be used to provide growth capital to help promising Bangladeshi businesses expand and develop key industry sectors.
Frontier has raised USD88m from development finance institutions and commercial investors. It will make long-term investments in privately owned, family companies in Bangladesh that are looking to expand and reach new markets. Its equity investments will range between USD2m and USD10m and target firms in the country’s export, agriculture, health, education, IT and services sectors.
Frontier is run by a first time fund manager, Brummer & Partners Asset Management (Bangladesh), and has raised capital from other investors such as the World Bank’s IFC, Norfund and FMO.
Frontier’s fund managers have already started to make investments, including in a business manufacturing batteries and in a supermarket chain in Bangladesh.
Anubha Shrivastava, CDC’s managing director for Asia, says: “CDC is proud to invest in Bangladesh’s first private equity fund. Our commitment to Frontier will have a powerful developmental impact on the private sector in Bangladesh. It will provide a vital catalyst for the growth of the investment industry in the country and help attract much needed third party capital.”
Khalid Quadir, chief executive of Brummer & Partners in Bangladesh, says: "The Frontier PE Fund is providing a new way of financing Bangladeshi entrepreneurs and companies. Having CDC as a partner in Frontier allows us the potential to invest in even more businesses and make the most of the untapped economic potential of Bangladesh."
