The Exit Layer Rebuilds
What Hosking Partners’ Sri Lanka Bet Signals for Venture Investors
Saint Clair Market Intelligence | January 2026
A major UK institutional investor has quietly built one of the largest foreign equity positions in Sri Lanka’s listed market - and more than doubled its money. For venture investors, the signal isn’t the returns. It’s what those returns imply about the exit environment.
The Capital Has Returned
Hosking Partners, a London-based fund founded by ex-Marathon Asset Management principals, began deploying capital into Sri Lanka during the depths of the 2022 crisis. While others fled, they bought. The thesis was straightforward: quality assets trading at a fraction of replacement cost, in a market temporarily abandoned by foreign capital.
Their holdings now span Sri Lanka’s blue-chip conglomerates - John Keells, Aitken Spence, Dialog Axiata, CT Holdings. By some measures, they’ve become the largest foreign investor in the Colombo Stock Exchange.
The numbers have vindicated the bet. Holdings have reportedly more than doubled since early 2023. GDP growth runs above 5%. Inflation sits at 0%. The currency has stabilised.
The Exit Infrastructure Question
For venture capital and LP allocators, the Hosking story carries a specific implication worth noting.
The conglomerates now attracting serious institutional capital - John Keells, Aitken Spence, Dialog - are precisely the entities that acquire innovative companies, launch corporate venture arms, and provide exit pathways for earlier-stage investors. When these groups are well-capitalised and their equity is liquid, they become active participants in the M&A market.
The conglomerates being bid up today are tomorrow’s acquirers of your portfolio companies.
This is the less obvious signal in the Hosking deployment: not just macro stabilisation, but the re-capitalisation of Sri Lanka’s exit infrastructure.
The Saint Clair View
Frontier markets are defined by exit risk. The question venture investors must answer isn’t whether promising startups exist - they do, in Sri Lanka as elsewhere - but whether there’s a credible path to liquidity.
When sophisticated European capital returns to a market’s listed layer, it suggests the exit architecture is rebuilding. Patient allocators willing to enter earlier in the value chain may find the path to realisation more plausible than sentiment suggests.
This bears watching. Early signal, not confirmed trend.
Source: Daily FT, “Sri Lanka offers very compelling opportunity after crisis reset: Hosking Partners”
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Saint Clair - Advisory & Capital does not provide investment recommendations. All decisions should be made based on independent research and consultation with qualified advisors.
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