Kathmandu, May 3
Two investment management companies in Kathmandu, established and led by foreigners and Nepalis respectively, on Wednesday announced the launch of a joint venture, which according to them will be work towards promoting SMEs in the country.
The joint venture between Kathmandu-based investment management company One to Watch, established by Dutch national Willem Grimminck, and True North Associates, a company owned by Nepali banker Suman Joshi, has a target of investing in small and medium-sized enterprises working in multiple sectors including agriculture, infrastructure, healthcare education and energy within next ten years.
“This is an important day for Nepal,” Grimminck announced, “The launch of this joint venture marks a shift in private equity market here. This is the first time local and international investors are coming together to support early-stage growth companies.”
According to him, they now will make investments in the enterprises and sectors which have a potential to help the country grow and develop in overall. “Our priority is the companies that contribute to the development of Nepal, make impacts here.”
Meanwhile, Joshi clarified that startups will not benefit from their programmes now as their focus is small and medium-sized enterprises which have an experience of at least four to five years into the business world so that they can assure impacts of the investment.
‘A good marriage’
Both the managing directors of the joint venture stated that their initiative will have three offerings for Nepali SMEs: access to finance, a combination of experiences and expertise, and expansion of services.
“Our partnership will provide Nepali companies an increased access, not only for capital but also for the market,” Joshi shared, “This is a good marriage between a Nepali and a foreigner—a new model in Nepali fund market.”
Joshi, who retired as a banker after working for leading Nepali banks for 24 years, said that his company, True North Associates, decided to combine its SME portfolio with that of One to Watch though True North is not limited to SMEs only because Nepal has a really small market for investment in SMEs; hence they need not compete but cooperate.
“Further, our partnership is aimed at combining skills, experiences, networks, and relationships that two of us already have as individual companies,” Grimminck said, “We will also organise other supporting activities for small and medium-sized enterprises and it will make us stand out from the rest.”
Nepal Impact Investment Community 2
Meanwhile, One to Watch also announced the launch of its Nepal Impact Investment Community 2 (NIIC 2), which the company hopes, will become Nepal’s largest private equity fund. It aims to raise around Euro 20 million (more than Rs 2.5 billion).
Grimmink said the estimated life of the fund is 10 to 12 years, in which they will make investments in the first half and collect back the money and exit from SMEs in the second half. Around 15 to 20 companies can benefit from the fund in total, he said, adding, the first investment will be made in next 1.5 years.
“A substantial fund size is needed to begin the actual investment. However, we have not set any benchmark as the minimum requirement for it.”
Grimmink hoped that both domestic and international investors will contribute their money to their joint venture as both the companies already have proven success in the past and they have a strong presence in both domestic and international markets. Grimmink also hinted at the possibility of expanding their market further even after next 10 to 12 years.
“Our forwarding ambition is a fund of Euro 10 million. It will be realised as soon as possible,” he smiled, “The Nepali market is already ready for it. This market deserves such a fund. But it has to be done step by step.”
