SINGAPORE – Leopard Capital LP, which manages a fund in Cambodia, plans to start investing in Sri Lanka, betting that economic growth will accelerate after the end of the country’s 30-year civil war.

The private-equity firm plans to start Leopard Sri Lanka Fund LP early in 2010, it said in a monthly newsletter this week.

The Sri Lankan army’s victory over the Liberation Tigers in May led economists to boost GDP forecasts and a stock rally, making the Colombo All-Share Index the second-best performer in Asia this year.

The Washington-based International Monetary Fund said this month that it expects Sri Lanka’s gross domestic product to expand 3.5 percent in 2009.

“After several decades of civil war, peace has finally returned to the beautiful island of Sri Lanka, and a new investment cycle and growth upswing has begun,” Leopard Capital said in the newsletter.

The fund will provide capital to “mid-market” Sri Lankan companies to help them expand domestically and in “other frontier economies”,

according to the firm, which manages the US$28.7 million Leopard Cambodia Fund, set up last year.

Colombo stocks may offer better returns as the end of the war frees up state spending for investments in infrastructure and farming, investor Jim Rogers said in August.

BLOOMBERG