Sept. 18 (Bloomberg) -- Eurasia Capital Management, which manages about $200 million of hedge funds across Central Asia, plans to sell shares in a Mongolia private-equity fund in Singapore in the first half of next year. Eurasia will list the fund, which will raise as much as $100 million, on Singapore's Catalist market for smaller companies, said Alisher Djumanov, managing partner of the firm.

Mongolia needs foreign capital to undertake mining on the scale of the $3 billion Oyu Tolgoi gold and copper project, or the $2 billion Tavan Tolgoi coal development in the country. Eurasia's fund will invest in banks, insurance, leasing, logistics and warehousing companies, as the mining boom spurs demand in the $3 billion economy, Djumanov said.``Local companies don't have enough capital to develop these sectors,'' he said in an interview yesterday in Singapore, where the company's based. ``Despite all the buzz, investments have been focused on high-profile mining projects.''

Foreign direct investment in the country rose more than 33 percent to $500 million last year, of which two-thirds were in mining, according to data compiled by Manila-based Asian Development Bank. Almost 70 percent of investments in Mongolia came from neighboring China, the world's fastest-growing major economy and the largest consumer of copper and other minerals.
 
`Pipeline of Projects'
 
Eurasia has a ``strong pipeline of projects'' before the planned listing of its Mongolia fund, which will likely offer returns of about 30 percent a year, Djumanov said. Eurasia will own 10 percent of the portfolio, he said. Eurasia's Mongolia Discovery Fund, the world's first fund focusing on the country, rose 11 percent this year, compared with the 23 percent drop in the MSCI World Index. The fund invests in coal mines, water utility as well as oil and gas companies.The company will be also selling shares at a time when investors avoid emerging markets and riskier investments amid a global credit crunch that has driven Lehman Brothers Holdings Inc. out of business this week. The MSCI Emerging Markets Index has fallen 37 percent this year. Singapore's benchmark Straits Times Index fell 30 percent.

Eurasia is still adding more assets in Mongolia. The company plans to acquire a commercial bank or seek approval for a new one in the country, which would be the ``centerpiece of the financial services strategy'' of the fund, he said. Eurasia started its investment banking and brokerage unit in Mongolia last week. It plans to double the size of its team there to 20 people in the next six months, Djumanov said.   Economic growth in the former communist country that became a democracy 16 years ago accelerated to 10.2 percent in the first quarter, from 9.9 percent a year earlier. Eurasia also expects to sell shares on London's Alternative Investment Market or Deutsche Boerse AG by next June to start other private-equity and property funds, and expand in Central Asia.