UK - London-based Ashmore Investment Management has announced the closure of its new Balkan Regeneration fund with an initial subscription of $20m (e 21.5m) from institutional investors.

The fund will invest in fixed income, both hard and local currency instruments, and equities in the Balkan region, with particular emphasis on Serbia and Montenegro.

Ashmore, who has long experience in investments in Eastern Europe, believes that the regeneration process taking place in this region will create interesting investment opportunities and aims to be one the first to catalyse inward flows of needed resources. The new fund is a five year initially closed-end fund, following the firm's conviction that investments in this area need a long-term and committed approach.

"We expect significant investment opportunities to arise as the economies regenerate from the troubles of the last decade, in particular, in Serbia and Montenegro, where asset valuation are currently at a low base," says Mark Coombs, managing director at Ashmore.

The firm also points out that this expected opportunities will be subject to the ability of the new governments of both the Federal Republic of Yugoslavia and Serbia to establish an appropriate regulatory framework, including best practice and transparent corporate governance, and the maintenance of the rule of law.

"This first Balkan fund is a small step that we intend to follow with larger financial commitments as long as a satisfactory investment environment is established and mantained," says Coombs.

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