Asia Wealth Management Company, the investment advisory arm of Sri Lankan investment bank Asia Capital, is keen on entering the luxury hotel industry to cater to more high net worth clients.

Through a partnership with Ceylon Development One of Japan, Asia Wealth Management will set up the Asia Capital Sri Lanka Hybrid Fund to look into two of the Sri Lankan firm's upcoming hotel projects in Wadduwa and Balapitiya. 

Speaking to local media on the sidelines of the fund's launch, Asia Capital chief executive Stefan Abeyesinhe reportedly said that the joint venture will be setting aside around Rs500 million for each of the hotels. The expected initial return from the investments is about $3.2 million.

The Wadduwa hotel will have 33 suites and is built on a 460 perch beachfront property equipped with all modern amenities. The hotel in Balapitiya will have 30 rooms and occupy about an acre of land.

Under the terms of the deal with CD One, Rs1.5 billion ($11.7 million) will be collected from Japanese corporations and high net worth individuals. The fund will be listed on the Colombo Stock Exchange and will invest in private equity projects, treasury bills, bonds and corporate bonds. 

According to a study by Asia Wealth Research Management, Sri Lanka's economy will grow at least 6.6 per cent year-on-year in 2013.