Reviving Cambodia

By Drew Wilson, 13 April 2012

New Indochina fundraising includes Cambodia, where an investor-friendly government is trying to reverse decades of ruin.

The pioneer spirit is still around. Namely, Leopard Capital and Dragon Capital, which have recently revealed fundraising efforts that include Cambodia. The fragile nation was decimated by the Khmer Rouge, who ruled by torture and mass extermination from 1975–1979.

Cambodia’s recovery from that period is accelerating. In 2011, GDP growth was 6.7 percent and 6.5 percent is expected in 2012, according to the IMF. People, money and ideas are also flowing between Vietnam, Cambodia and Laos, creating opportunities for regional integration, sources say.

The government allows 100 percent foreign ownership and encourages private equity investment to help revive industry, says Doug Clayton, chief executive of Leopard.

The pursuit of attractiveness

Focus Asean, Volume 2 | April 2012
By Philippe Beco,
Cambodia Interview with Douglas Clayton

Cambodia is broadly applauded by investors for its openness to
foreign businesses as well as low tax and regulatory regimes.
Douglas Clayton of private equity firm Leopard Capital shares his
views on what gives the Kingdom that special factor.

A pioneer investor in frontier markets, Douglas Clayton is used to betting on Cambodia's growth potential. The founder and managing partner of Leopard Capital, the Kingdom's first private equity fund with investments in energy, financial services, real estate and consumer goods businesses, talks about the Kingdom's pull factor and the sectors investors should consider.

What should push an investor to start a business in Cambodia rather than its neighbouring countries? What are the country's competitive advantages?

Cambodia has one of the most open economies in the region. The government is not trying to control economic development as in some neighbouring countries and leaves it to the market to decide. It has an open licencing policy for most sectors and doesn't prevent the arrival of newcomers in order to protect incumbents, so it is quite easy for foreign businesses to enter this market. Cambodia is also attractive thanks to a low cost base in terms of land and labour, although it has higher energy and transportation costs.