Japan investor forming Myanmar private-equity fund

Patricia Higase, a half-Burmese, half-Japanese equities investment veteran, is laying the groundwork for a private-equity fund to invest in Myanmar.

She has established Link Road Capital Management as a vehicle to launch funds investing in Myanmar on behalf of global institutional investors.

Based in Tokyo, where she is a Japanese equities manager, Higase says the fund must wait for US sanctions against Myanmar to lift, and for the government in Naypyidaw to pass an investments law that is currently being discussed in its parliament.

“This is too compelling an opportunity to sit out,” says Higase, a Burmese speaker who has run Japanese equity portfolios in the United States, Canada and Japan for franchises such as Eaton Vance, Fidelity and Matthews Asia.

She believes the country will change and advance faster than most people expect. Not only is the political situation moving quickly, but the workforce is young and increasingly exposed to English. Myanmar’s phase as a centre of low-cost labour will not last long, argues Higase, and the country will begin to move up the value chain as an economically ambitious state strategically situated between India and China, with Singapore as its model.

Most Burmese expatriates are very nationalistic and those with international experience will be eager to return home, she adds.

There is no stock exchange so the opportunity set for now is in private equity – notably property – but also in healthcare and tourism. Infrastructure and telecommunication industries are also going to open rapidly.

Higase is assembling a group of people with sector experience from around the region, including many Burmese speakers or nationals, to work with Link Road as advisers or project managers. “This kind of fund can only work if you are focused on rolling up your sleeves and adding value operationally,” she says.

It is too early to discuss the fund’s potential structure, says Higase, who believes many private-equity players, particularly those with emerging-market funds, are laying plans for Myanmar. But without local connections, she says, investors will find it “high risk”.