Myanmar is an emerging market and long-term play for investors seeking to come in. In the following interview, Mizzima talked with Mr Lim Chong Chong, Ascent Capital Partners Founder and Managing Partner about the launch of a Myanmar-focused private equity fund – Ascent Myanmar Growth Fund – and the prospect for the economy and investors.
Please could you introduce your company?
Our company is Ascent Capital Partners. We are a fund management company and we are Singapore registered, we have offices in Singapore and also in Yangon. We run a Myanmar-focused investment fund. The fund is called Ascent Myanmar Growth Fund. We started the fund last year and why are we interested in Myanmar? I have been here since 2013. I’ve been in Myanmar for six years and I believe Myanmar has a lot of opportunity, a lot of long-term potential, and that is why we are interested to set up this fund to invest in Myanmar.
Not just us. We have other investors invested in the fund. These investors include Temasek, Asian Development Bank, and also a Filipino large conglomerate called JG Summit as well as respected investors from Singapore and Myanmar. These are the investors in the fund we manage. We manage the fund independently, so there are investors who invest in the fund.
So why the focus on Myanmar?
We believe Myanmar has potential and opportunities across many different sectors. We like five sectors a lot and these are consumer, education, health care, TMT, which stands for telecom, media and financial sectors. We will also look at other sectors but these are the five sectors we prioritize.
Firstly you are focused on the five sectors?
If there are other opportunities that we see that which are outside these five sectors, we will also look at them, we will also invest, but these are the five sectors we believe we will be able to leverage on Myanmar’s potential and also for fit into our investment thesis.
Maybe also as a further introduction of our fund, we see ourselves as a long-term investor. As you might now, we are a private equity fund, of PE Fund, so most PE Fund the investment is five to seven years, meaning after they invest they will need to (see a return) on their investment in five to seven years. For us, we are a long term investor, we invest 10 or 15 years. So we are not overly concerned about the short-term fluctuation in the economy. We look at Myanmar, we ask ourselves, 2030 or 2035, how ill Myanmar be and we believe over the next 10 or 15 years Myanmar will prosper and will thrive in the long-term.
Short-term, there will some challenges, as we all know, we are focusing on the long-term.
Over the next two or three year, Myanmar is facing some difficulty in Rakhine State. Will this affect whether investors will come into Myanmar?
Okay, if there is one thing that the Myanmar State Counsellor said that resonates with me she says there is nothing that is comfortable that is profitable. Anything that is comfortable may not be profitable. Anything that is not so comfortable may be profitable. That is what she said just now.
The point is we need to understand that in investments, there is a concept of risk and rewards. Sometimes you have to take on a bit more risk to get rewards. I think today we have to recognize that quite often Myanmar people see Myanmar’s potential as Asia’s last frontier, or Southeast Asia’s last frontier, right? So frontier market or emerging market means that the risk is higher. That is why you have potentially higher return and higher risk. If the risk is low, the rewards will also be low. With that in mind, if we look at your question about Rakhine in the context of Southeast Asia, most countries, especially emerging economies, they do have their political risk. So we recognize that.
Are we concerned? Yes, we are. We watch it closely, carefully, but it does not take away the fact that Myanmar has long-term potential. We all hope that everything will go well, right? We hope Myanmar will handle the short-term political fallout so that Myanmar will grow and prosper.
I am Singaporean. As a Singaporean, we believe that, I would say, prosperity and peace goes hand in hand. When there is prosperity, there is peace. When there is peace, there is prosperity.
How do you view the process of doing sustainable business in Myanmar, particularly the concern about tea money. How do you view this in terms of the investor?
I think there are two questions there. In the first question, is on development in Myanmar, I think this is a wonderful development, the focus is not just on development, but economic development in a sustainable manner, which is also what we believe in. As you might know, one of the investors in the fund that we manage is ADB, Asian Development Bank. So Asian Development Bank also believe it is about making sure that there is sustainable development, so that is one thing. Why I mention that is that as a businessman and as an investor, I do believe that if we focus on sustainable development, it is also good for business. Because it helps to future-proof your business and investment. As a long term investor, we are not here to make short-term money. We are here to make long-term returns. And over the long term, if we care about the environmental goals will we be able to grow the business as well as grow the economy.
Now your question about corruption. So for me, I personally believe this exists but I have not personally encountered such incidents. And for me perhaps these are one of the business risks, business challenges, that anyone will face in any emerging market. And I do hear that the situation is improving.
What would be your advice for investors interested in Myanmar?
I think my advice, if there is any, because I am an investor, so I don’t want to give too much good advice otherwise I will get too many people who will come in and compete with me, right? Okay, jokes aside, I would say that any potential investor, whether it is Burmese or international investor, foreign investor, have to ask themselves what is their investment horizon. What is it? Is it one year? Is it three years? Is it 10 years? Is it 30 years. Myanmar is not a short-term market.
Anybody who wants quick returns, say one year or three years, as an investment destination. If one has a long-term investment horizon, is here for the long term, and they will be able to benefit from the growth and prosperity of Myanmar over the long term. So one has to be patient and be here for the long term.
Do you have anything else you would like to say?
If I may add, so we are Myanmar-focused fund manager. So we manage a Myanmar-focused fund, so we are very optimistic about Myanmar’s potential and we really hope to be able to play a role in terms of supporting the growth and development of Myanmar companies, so we are going to support the transformation of Myanmar companies and we want to support the value creation for Myanmar companies for the shareholders. We are here to support Myanmar homegrown companies, we are not here to compete with them, we are here to provide the knowledge to support the development of Myanmar companies. And I do hope to have the opportunity to work with Myanmar business owners for the long term.