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Description |
REG: AUREOS SOUTH ASIA FUND |
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Objectives and Scope |
The Fund provides financing to SMEs that demonstrate potential for above-average growth rates and the capability to expand regionally, with the objective of earning a risk-adjusted return over 3 to 5 years. The specific target for investments are SMEs in South Asia primarily India, Sri Lanka and Bangladesh. Investments include expansion, management buyout, restructuring, change of control transaction, consolidation and several investments in start-up and early stage companies. |
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Linkage to Country/Regional Strategy |
ADB's investment in the Fund is consistent with the country strategy and program, and complementary to ADB initiatives. It will directly contribute to mobilizing resources and improving financial intermediation and investment in private sector projects. ADB's equity financing of SMEs is a part of a comprehensive approach by ADB, through policy dialogue, to improve the local regulatory and legal environment for SMEs and the private equity industry as well as the efficiency of the financial sector. |
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Status of Development Objectives |
By providing financing for this transaction, ADB will achieve the following development objectives: (i) mobilize long-term capital in the form of private equity for SMEs in South Asia; (ii) diversify the sources of finance available to SMEs; (iii) demonstrate to the private sector that investment in entrepreneurial SMEs in South Asia can be commercially attractive; (iv) provide management advice to SMEs in financial planning, business expansion strategies, human resources development, and implementation of international standards of corporate governance; (v) create sustainable employment in the SME sector in South Asia; (vi) stimulate private sector development; and (vii) support the development and growth of South Asia's private equity and portfolio management professionals. |
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