NDB Capital Holdings Plc had said that it is planning to to float a private equity unit with US-based firm Zephyr Management LP. In a stock filing, NDB Capital Holdings chief executive Vajira Kulatilaka said, "The ultimate objective of the proposed arrangement is the creation of private equity funds that will invest in Sri Lanka."

NDB capital, based in Sri Lanka, is the only investment bank in the country that offers full investment bank services like debt and equity raising, among others. The bank has entered into a strategic alliance with DBS Bank of Singapore in 2011 to expand its investment banking network.

Zephyr Management LP, based in Park Avenue, New York, is a limited partnership firm. Zephyr and NDB Capital would be developing a structure to form as a private fund manager.

NDB Capital also said in the filing that the move to create a private equity arm would need regulatory approvals.