globalinvesting's Commentaries
Serendipity
Raj
Rajaratnam, the accused Galleon hedge fund insider trader, was arrested just before he
was due to fly to London. Bloomberg today tells what he was planning
to do there. The Sri Lankan-born Tamil investment manager was planned
to create a fund to invest in that country, now that the war between
its Sinhalese and Tamil populations has ended.
The war's end sounds like a good and serendipitous reason to invest in the Island of Serendipity, before it became Ceylon, and now Sri Lanka.
Rajaratnam hoped to raise $200 mn for a country fund to be listed on the London AIM, a sort of low-grade Nasdaq. His partners were to be Collins Steward plc and Rothschilds, a brokerage and a bank, both with good reputations. There is another Sri Lankan fund in the offing to be created by Leopold Capital out of Phnom Penh, a more unlikely site for luring in investors, with a smaller target size, of $100 mn.
Emerging markets are hot these days. Year to date, $50 bn has flowed into emerging market funds according to EPRI, a tracking service. Most of the flows are into the BRIC countries: Brazil, Russia, India and China. Sri Lanka is not on the radar.
Next week I will attend a conference sponsored by Bank of New York-Mellon and Dreyfus to examine whether it is time to reverse investment in these countries.
But for the record, as part of its out-of-court settlement of a decades old case of exchange control violations and tax evasion by a former staffer from Russia, BNY has undertaken to continue to finance investment flows into Russia.
More for paid subscribers about how to invest in Sri Lanka follows.
The Model Portfolio to be produced over the weekend will show the change.
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