A year ago, Asia’s second fastest growing economy was a hot prospect for adventurous private equity investors. It ticked many boxes: liberal foreign ownership laws; low taxes, favourable trade and investment privileges, an inexpensive and youthful labour force, an abundance of underutilised land, water and natural resources, an increasingly stable political environment, entry to the World Trade Organisation (WTO), the development of a legal system and a stock market, combined with substantial deal flow at attractive valuations to draw the interest of international investors.

Cambodia may be best known for decades of war and the horrors of Pol Pot’s Khmer Rouge, but the progress made by the country in the 15 years since the UN brokered a peace deal in 1993 has attracted the interest of private equity investors. New firms were established in 2007 with ambitious fundraising targets including; Leopard Capital (US$100m), Cambodia Emerald (US$100m) and Frontier Investment & Development Partners (US$200m). Those plans, and Cambodia’s growth story, have been hit by the global financial situation. Leopard and Frontier Investment & Development Partners (FIDP) are...

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