UB Post
Ulaanbaatar, September 10, 2008
Interview with Mr Alisher Ali Djumanov, Chairman of Eurasia Capital Group
“Eurasia Capital intends to build leading investment bank and brokerage house in Mongolia”
UB: Please describe our readers about your firm.
AD: Sure. Eurasia Capital Group (ECG) is a Singapore-based investment group with focus on principal investments primarily in Central Asia and Eurasia region. ECG has two major lines of businesses: Eurasia Capital Management, our fund management subsidiary and Eurasia Capital International, a pan-regional investment banking arm. Our firm is quite young established only in January this year!
UB: Really? That is really young! But based on your bio listed on your company, you have extensive professional experience and track record.
AD: Thank you. I have many years of investment banking, investment management and advisory experience in both leading financial centers such as New York, London, Zurich and Singapore as well as emerging markets like Russia, Kazakhstan and Uzbekistan. I co-founded Ansher Capital which became the leading investment bank in Uzbekistan and Central Asia and have won many awards such as Euromoney Award of Excellence. I also founded Central Asia Opportunity Fund (in November 2006), one of first hedge funds focused on Central Asia. I sold my 50% stake in Ansher Group in the end of 2007 and now utilizing my extensive experience in building Eurasia Capital Group and its subsidiaries together with international partners.
UB Post: How did you develop interest in Mongolia and when did you visit to our country for the first time?
Well, it is my favorite story. I received invitation to attend Euromoney Mongolia conference in Ulaanbaatar last year. I have to admit that I had limited knowledge about Mongolia which was based primarily on my high school readings. So I came to Ulaanbaatar for the first time exactly one year ago last September for two days. Those two days were more than enough for me to realize enormous potential of Mongolia. After that I returned to Mongolia two more times last year before launching Mongolia Discovery Fund in January 2008.
UB Post: Yes, I read the Bloomberg article last week about Mongolia Discovery Fund
Eurasia Capital Mongolia. Can you tell us more about it?
AD: Eurasia Capital Management manages 6 various regional, industry and country funds including Mongolia Discovery Fund. Our funds invest across Central Asia and Caucasus as well as selectively in Russia, Ukraine and Turkey. However, Mongolia is one of the most promising frontier markets which is still in its infancy stage of development. The total market capitalization of all domestic stocks combined in Mongolia is less than USD 750 million. As the same time, the value of Mongolia Energy Corp, Ivanhoe Mines and Centerra Gold (three largest internationally listed companies that have assets in Mongolia) is ten times larger above amount. So the potential for growth of the domestic stock market is significant. Moreover, there are numerous investment opportunities in property market in Mongolia as well as investing in stakes in private held companies that would seek listing and IPO in the near future. When we described these investment opportunities to our international investors earlier this year, they became very much interested in gaining exposure to Mongolia. Therefore, we decided to launch Mongolia Discovery Fund with USD 5 million in capital from these initial investors. Now the fund has USD 20 million in assets and we intend to increase it 5-fold to USD 100 million. At that point, Mongolia Discovery Fund would become one of the largest portfolio investors in the country.
UB: This is quite exciting. I understand your Group decided to establish its subsidiary in Mongolia. What are your plans?
AD: Indeed, we have ambitious plans. Eurasia Capital Mongolia is our newly established subsidiary in Mongolia. We intend to build the leading investment banking and brokerage firm in Mongolia offering international standard services in areas of corporate finance, mergers & acquisitions, capital markets, equities sales and trading, research and advisory. Eurasia Capital will assist Mongolian companies in raising capital domestically, regionally and internationally. This firm will advise our funds that will increase their investments across various sectors of the Mongolian economy. Our investment bankers will also advise other international portfolio and strategic investors on their investments and acquisitions in Mongolia.
UB: I know there are many brokerage and investment advisory firms already present in Mongolia. What would be a competitive advantage of Eurasia Capital Mongolia?
AD: You are certainly right about strong competition in this area. And we believe such competition will only increase in coming months and years. However, we believe that Eurasia Capital Mongolia has a strong potential to become one of the leading players thanks to our extensive experience in this area. There are 25 professionals working in our offices in Central Asia and Mongolia. Our initial team in UB consists of five professionals but we will increase our professional staff to 20 in Mongolia in the next six months. There will be dozens of professionals working in other offices in the region who would be also involved in our projects in Mongolia. Our pan-regional approach and relationships with major international investors will allow Eurasia Capital Mongolia to build successful franchise relatively quickly.
UB: So you will be actively hiring local specialists in UB?
AD: Absolutely! We have already started our active campaign for hiring Mongolian professionals both in Mongolia and outside. I would like to emphasize that our success in Mongolia will depend on the quality of professionals we would attract. We intend to provide them with international level training in the area of investment banking, brokerage and advising international investors. Moreover, we know a number of Mongolians who work in the US, Europe and Asia and we would like to allow them to return to their homeland and we are ready to offer them excellent career advancement opportunities.
UB: Thank you very much for your time and I would like you and your colleagues success in Mongolia
