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Matthias Knab, Opalesque for New Managers: Capital Alliance Holdings PLC (CAL), the Colombo-listed investment banking and asset management group, has agreed to acquire a 51% stake in Asia Frontier Capital Ltd. (AFC), the Hong Kong-based frontier equity specialist founded by Thomas Hugger. The deal, made through CAL's wholly owned Singapore subsidiary CAL Global Pte. Ltd., still requires regulatory approvals, including from the Securities and Futures Commission of Hong Kong.
For CAL, the transaction is a major step in its international expansion. It links the group's operations in Sri Lanka, Bangladesh and Singapore with AFC's investment platform in Hong Kong and its on-the-ground teams in Vietnam, Uzbekistan and Iraq, with the aim of combining local market insight with access to international investors.
A two-way conduit for frontier capital
"Frontier markets offer some of the most compelling growth stories in the world, yet they remain hard for international investors to reach. This partnership changes that," said Kanishke Mannakkara, Group CEO of CAL. "It also takes us into three more frontier markets, giving us a platform to build a deeper presence there over time, and into Hong Kong, one of the world's most important financial hubs."
Mannakkara said the combined business would channel international capital into frontier markets while also giving investors in CAL's home markets access to opportunities "across the frontier and beyond." He added: "Thomas and his team have built a respected franchise over more than a decade, and we are delighted to be building the next chapter together."
AFC: USD125 million across Asia's frontier
Founded in 2013, AFC manages more than USD125 million for investors in Europe, Asia and North America. Its range includes the multi-country AFC Asia Frontier Fund as well as dedicated funds for Vietnam, Iraq and Uzbekistan. The firm has also been a long-standing investor in Sri Lankan and Bangladeshi equities, where it is regarded locally as a pioneering international investor.
Hugger stressed continuity for AFC's investors: "Frontier markets reward local knowledge and patience, and CAL has both. Our investors will continue to benefit from the same approach to managing their money, with the same team, investment process and independence in our decisions. What changes is the strength of the platform behind us."
He pointed to CAL's research and data capabilities in markets where information is scarce, its expertise in frontier fixed income and its investor relationships across South Asia, adding that the backing of a listed group would strengthen AFC's compliance, technology and operating platform. "After more than a decade of building AFC, I can think of no better partner for the next chapter."
About CAL
Established in 2000 and listed on the Colombo Stock Exchange, CAL offers investment banking, asset and wealth management, fixed income, stockbroking and research services, and manages more than USD1.2 billion across Sri Lanka and Bangladesh.
Once the deal completes, the two firms plan to explore broadening AFC's product range, including frontier fixed income and further country-specific strategies, subject to regulatory requirements.
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