This content is from: Innovation

Hedge Funds Wrestling With Mongolia

It was just a matter time when thrill-seeking hedge funds in search of untapped sources for boosting returns would reach out to Mongolia.

It was just a matter time when thrill-seeking hedge funds in search of untapped sources for boosting returns would reach out to Mongolia. Bloomberg News reports that the Asian country is in rapid-growth mode, thanks to its copper and gold mining industries. “The search for investment returns is driving hedge funds and private-equity specialists to unusual places like Mongolia,” Tom Ashworth of Sniper Capital Management told Bloomberg News. “It’s a new frontier. It’s the equivalent of investing in China in the ’80s.” As much as hedge funds are risk-takers, when it comes to Mongolia, they need to have a stomach for the local corruption and unpredictable regulation. For now, with China hugging Mongolia’s southern border from east to west, it is no wonder the world giant is the source of half of Mongolia’s foreign investment just as hedge funds and others from elsewhere are first taking the grand tour of money-making possibilities. Hong Kong-based hedge fund Lim Advisors, for example, has been seeking out investment opportunities for four years and currently offers short-term debt and trade finance for projects that reportedly produce returns of 12% to 20%. And Hong Kong-based private equity firm Asia Pacific Investment Partners is in the process of raising about $25 million for a property fund that will invest in Mongolia. “The world is awash with liquidity,” Thomas Taso of Shanghai-based Gobi Partners, a venture capital firm. “Mongolia is an exciting growth market where few people have gone.”

Related Content