- Industry focus is predictable:
“it wanted to invest in ventures with existing corporate clients in several areas, including the consumer, retail, industrial, health care and natural resources sectors”
- A thesis that came up during the 24 Jan NYC investment panel on Bangladesh was that BD (=Bangladesh) may actually benefit from the global credit crunch as investor wish for diversification redirects funds. The Reuters article suggests this as one of JPMorgan’s motivations:
“ratcheting up their investments in the fast-growing Indian and Chinese markets as a global credit crunch hampers big buyouts in Europe and the United States”
- But private equity in Asia may look different from what it is in US/Europe:
“But in a region where full-scale buyouts are often frowned upon and are difficult because families are still the main players in business, funds have had to settle mostly for taking minority stakes.”
- Will that model work in Bangladesh? Time will tell…
March 3, 2008 at 5:08 am |
Private equity should work in my opinion in two manners in BD. One is to provide access to capital to entrepreneurs with a good team to implement an idea whose time has come. In this scope it’ll be more like venture capital on steroids. These should involve stake holdings depending on how important the industry/idea[ market scope/size] is, how seasoned/passionate the entrepreneurs are above and the economic moat.
Second approach should be vulture capital-ing or very different form of leverage buy-out. The large corporations held by corrupt loan scammers in BD and political aparatchiks should be seized and resold to private investors ..who would then re-capitalise restructure and take it public. This is the only way to get back the countless billions of taka stolen. Think Russia and the former soviet block countries as a model. This can work in the jute, tea and many sectors. In cases where a clear value added can be achieved hostile takeovers should be encouraged. There is a need for a bit of creative destruction to build a corporate infrastructure in BD. What we have now ..or at least had till very recently is our very own “Robber Barron” era.