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Sri Lanka needs private equity to play a bigger role in financing business which will help them grow faster with less leverage and become world beating firms, the Central Bank said.
The central bank said it its recently released annual report that "it is imperative to strengthen the role of private equity as a major source of financing for Sri Lankan enterprises."
"The central bank is very keen that private equity funds come and operate in Sri Lanka," Governor Nivard Cabraal told reporters.
"We may not be involved directly, but it is a kind of an initiative that we would like to see taking place in our country.
"Because that is the next stage of taking the well-managed companies that needs capital and even better management techniques in order to face the rest of the world in competition."
Private equity is a broad term referring to a specialized form of financing of companies which are not in public markets.
A typical PE management firm will collect money from a few large investors to build a fund which will and invest in identified firms with a strong potential for growth.
The Central Bank said banks have been the traditional source of funds but it leads to high leverage which can in turn limit the capacity of firms to invest and expand
"Availability of private equity for businesses would enable enterprises to grow faster and be competitive in the local as well as international markets.
"In addition to the provision of capital, PE firms provide expertise in various areas such as risk management, business development, market specialization and corporate governance bringing such expertise into the investment process.
Read more -http://www.lankabusinessonline.com/news/sri-lanka-central-bank-see-major-role-for-private-equity-financing/1214646898
The central bank said it its recently released annual report that "it is imperative to strengthen the role of private equity as a major source of financing for Sri Lankan enterprises."
"The central bank is very keen that private equity funds come and operate in Sri Lanka," Governor Nivard Cabraal told reporters.
"We may not be involved directly, but it is a kind of an initiative that we would like to see taking place in our country.
"Because that is the next stage of taking the well-managed companies that needs capital and even better management techniques in order to face the rest of the world in competition."
Private equity is a broad term referring to a specialized form of financing of companies which are not in public markets.
A typical PE management firm will collect money from a few large investors to build a fund which will and invest in identified firms with a strong potential for growth.
The Central Bank said banks have been the traditional source of funds but it leads to high leverage which can in turn limit the capacity of firms to invest and expand
"Availability of private equity for businesses would enable enterprises to grow faster and be competitive in the local as well as international markets.
"In addition to the provision of capital, PE firms provide expertise in various areas such as risk management, business development, market specialization and corporate governance bringing such expertise into the investment process.
Read more -http://www.lankabusinessonline.com/news/sri-lanka-central-bank-see-major-role-for-private-equity-financing/1214646898
