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Why Investment firm Anthem Asia is Betting on Myanmar

And how an investor establishes presence in an emerging economy

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BY Adelle Chua - 01 Mar 2017

PHOTO CREDIT: Getty Images

The principals of investment company Anthem Asia have decades of working in private equity and investment in the continent. For the past 30 or 40 years, urbanization and the rise of the Asian consumer has been the main business story. “It’s been a wonderful story – a huge rise in prosperity and tens of millions of families escaping poverty,” says Josephine Price, managing director and co-founder. “A missing jigsaw piece in that story has been Myanmar.”

In the past few years, however, that missing piece seems to have been found.

The country once ruled by a military junta has so much going for it. “Size, about the same as Texas. A favorable location between China, India and other ASEAN states. A major agricultural base with significant sources of water within its borders; a wide range of natural resources plus oil and gas; and 50+ million people, hence the potential to be an important domestic market,” she says.

 

Setting up shop

There are many ways for an investor to establish presence in an emerging economy.

A company can start with a virtual presence – just a Yangon address, for instance. And then it can take a desk when an executive needs visits for a week or two. Finally it can have a serviced office when it has several staff members. “Later, as they find their feet and decide where to base their operations, they move out to permanent premises,” says Price.

In fact, larger investors and traders from next-door Thailand send their staff to Myanmar to stay there from Mondays to Fridays. It’s only a one-hour flight. Over time, however, this arrangement will change as their operations grow.

Anthem Asia, for instance, has decided to establish an office in Yangon. “You need to demonstrate commitment...you need to have presence to get to know the market and the people...because things take time to happen,” says Price, “You can’t do that by flying in and out.”

She also mentions a need to show consistency. “Potential partners have seen foreigners come in and say that they will do things...and then disappear.”

 

A changing structure 

Indeed, much has changed in Myanmar. An example would be the composition of the expatriate community. The number is still low compared to neighboring countries, but whereas before they worked for international NGOs or UN agencies, “now there is a flourishing expat business and investment community ranging from representatives of multinationals, now you have European backpackers looking to stay and work for a year or two. A variety of chambers of commerce and business associations have also appeared,” says Price.

Moreover, “Asian businessman” does not just mean Japanese, South Korean or mainland Chinese...There are ASEAN expats from Thailand, Malaysia, Singapore and Vietnam,” she adds.

Internally, the change is also palpable. “Larger, established groups know they need to modernize and become competitive in order to stay successful. There are many, many young entrepreneurs and a thriving start-up scene. They have spent time studying and working overseas and now return with energy and a commitment to help rebuild their country.”

 

Picking out partners

To date, Anthem Asia has invested in nine companies in Myanmar. These nine have been selected according to profile and potential.

“The Myanmar economy is structured like a dumbbell,” Price said. There are a few large businesses on one end, and then hundreds of thousands of small ones at the other end. There are very few in the middle. We seek out businesses that are small today but have the potential to be substantial companies.”

These companies range from public relations to data collection to tourism, wellness, education, and a traditional teahouse.

“Our focus is on building sustainable local brands and businesses that serve domestic demand. We see opportunities in marketing and communications, food and beverage, tourism-related businesses, leisure and entertainment, training and education, and agri-business.”

“We look for partners with ambition, commitment, drive. We like to do things properly as we believe that builds sustainable and valuable business over the long term. Our partners understand the importance of planning, corporate governance, proper taxes, avoiding corruption,” Price says.

 

A people solution

Most investors in Myanmar are optimistic despite multiple challenges in the political, policy, financial, legal and regulatory level. “These are being worked through,” Price says.

Investors also face implementation/execution risk – “not having enough people with the right skills and the right experience to turn plans into practice. This constraint affects every level in every organization in every sector,” she says.

This is today’s Myanmar. “But it will change with time. We are excited and hopeful that the future will be good. There are interesting and energetic people who want to make their lives better. Who would not want to be involved in making Myanmar successful?”

“The cycle is unfolding much faster; Myanmar is powering ahead,” she says.