Nepal, May 28 -- Nepal's private capital market has come a long way. What began with a single pioneering firm and later a first institutional fund has grown into an ecosystem of nineteen licensed Specialised Investment Fund (SIF) managers operating under the oversight of the Securities and Exchange Board of Nepal. For a market of this size and stage, that is a meaningful achievement. The question now is whether the next wave of investors and fund managers will build on this foundation wisely, or repeat the mistakes of the past.

The earliest institutional investors were Development Finance Institutions - public or quasi-public bodies with commercial mandates, typically backed by foreign governments, whose role includes catalysing investme...