China was 30 years ago. Dubai was 20 years ago, and Kazakhstan 10. If you want to go to the next boom country, go to mineral-rich Mongolia.
The boom has already started. A construction surge has reshaped much of the capital, Ulan Bator. A Louis Vuitton boutique has been open for almost a year. And here’s another milestone: the first Mongolia-focused investment bank has opened – and the head of UBS’s London mining team is on board.
Resources Investment Capital has opened an office in UB – as the city’s avant-garde expats call Ulan Bator. It’s a consortium of Origo, a Beijing-based private equity house, and Monnis, a Mongolian conglomerate.
The boutique investment bank’s nickname, Rescap, evokes
Rencap (Renaissance Capital), a bank known as a perennial Russian bull. It appears that Rescap’s ambition is to be for Mongolia what Rencap was for Russia.
Rescap will be the first international bank for foreign investment professionals in Mongolia seeking to fundraise for Mongolian state-owned companies and buy Mongolian mineral assets. It will assist companies coming in to Mongolia. Many are trying in the year since Rio Tinto and Ivanhoe Mines signed the Oyu Tolgoi Investment Agreement. Companies from Shenhua in China to BHP Billiton in Australia to Peabody Coal in the US are either invested there or are said to be interested.
Eric Zurrin, head of UBS’s mining team in London, will lead the bank as one of its equity partners. There are other Oxbridge types heading out to Ulan Bator, with wife, kids and Siberian-winter parkas in tow, according to a British mining investor who has lived there for several years. He added:
It’s incredible, these Old Etonians coming out to Mongolia. You can believe it’s going to happen, sure, the Mongolian mining boom. And sit and London in believe it.But this is different. They come here and they see it. They’re actually moving here with their kids. At the moment no Mongolian companies are listed on Hong Kong’s stock exchange. But within a month that should have changed: Mongolia Mining Corp is preparing for an IPO worth $700m-$1bn. Other former state-owned assets are expected to follow.
By the time the next IPO comes around a few more pinstriped professionals may have touched down at Genghis Khan International Airport – and stayed!