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Hong Kong's Cube Capital and Marc Faber-backed Leopard Capital are among Asian private equity firms lining up nearly $500 million aimed at Myanmar, hoping to tap into its rich natural resources and fill its infrastructure void, as sanctions on the former pariah state are lifted.

After 50 years of military rule, Myanmar is one of Asia's poorest countries, but with abundant resources like oil and gemstones, it's one of the last untapped frontier markets. Dramatic political reforms have opened the path to foreign financial investments, though putting money to work there is expected to take time.

Leopard Capital, whose chairman is emerging markets investing guru Faber, plans to raise a $100 million fund dedicated to Myanmar, founder Douglas Clayton told Reuters.

"Myanmar's been on our list for a long time, but it wasn't the right time until recently," said Clayton, who has been visiting the country for the last 20 years.

Others drawing up plans include Cube, which could invest around a third of its up to $200 million fund invest in Myanmar, and the Indochina Opportunities Fund, a joint venture between Vietnam's Dragon Capital and private equity firm Frontier Investment & Development Partners, which has dedicated a portion of a $250 million fund to Myanmar.

Hong Kong-based Bagan Capital is raising $50 million for the country, and Link Road Capital Management, co-founded by Patricia Higase, a Japanese investor with Myanmarese r o ots, also plans to raise a fund.

Northstar, an affiliate of global private equity giant TPG Capital, is already scouting targets in Myanmar, after years of focusing its deals withinIndonesia. The firm's latest $820 million fund is Indonesia's largest, but 15-20 percent of that money could be invested outside the country, one source told Reuters.

In response to the recent political reforms in Myanmar, the United States moved to suspend sanctions on the country last week, after similar moves from the European Union, Japan andAustralia.

After years of isolation, the country has development needs in almost all its industries and the easing of restrictions are set to allow a flood of investments into the country.

Leopard Capital this week took 35 investors into Yangon to meet companies there, said Clayton.

Promising annual returns of around 30 percent, the firm will partner with Asian multinational companies to focus on investment opportunities in Myanmar's real estate, financial services, infrastructure and utilities sectors, he said.

The country's hotel industry is another area Leopard is eyeing, with tight supply causing Myanmar rooms to cost 4-5 times more than those in Cambodia, he said.

RISKS

Myanmar plans to set up a securities exchange by 2015 with the help of the Tokyo Stock Exchange and Daiwa Securities Group.

Still, the private equity opportunities, while open season, come with heavy risks.

The country so far lacks a clear legal framework to protect private and foreign investors, and allow capital repatriation, said Suvir Varma, Asia head of private equity at Bain & Company.

One challenge is a paucity of privately owned companies, with many of the major groups still tied to the government.

"It will be a hotbed of private equity investing in a few years time, but right now it's still too early," said Raj Rajkumar, Partner at Symphony Asia Holdings.

Malaysia-based Navis Capital, which has been investing in Southeast Asia for over two decades and manages $3 billion in funds, is not planning to do direct investments in Myanmar, said its managing partner Nicholas Bloy.

Instead, Navis seeks exposure to the country by investing in companies with regional operations and the potential to expand into Myanmar.

For example, Navis owns Singapore container storage firm Eng Kong Holdings, which could expand its port services to Myanmar when trade between the country and its Southeast Asian neighbours starts to thrive, Bloy said.

Comparing Myanmar to Indonesia a decade ago, he estimates that Myanmar may need another 10-12 years before it's ready for mainstream institutional private equity to invest in.

"The risk of being embarrassed in Myanmar is greater than the opportunity right now, if you're an institutional investor or a fiduciary," Bloy said.

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