Vietnamese brokerage SSI Securities Inc has partnered with Thailand’s largest private company CP Group and the Development Bank of Japan (DBJ) to launch a $150-million private equity fund to invest in the Vietnamese market.
The tripartite agreement is between general partners SSI Asset Management Company Limited (SSIAM), a subsidiary of SSI; CT Bright, the investment arm of CP Group; and Mercuria Investment Co., a fund management company under DBJ.
The newly established fund — the Vietnam Growth Investment Fund (VGIF) — has raised $25 million from GPs for its first close and is expected to reach a final close next year.
VGIF will focus on enterprises in consumer, agriculture, food, beverage & retail, industry, technology, media, financial services, healthcare, pharmaceuticals, real estate, logistics, and travel & hospitality sectors. It is targeting 5-10 investments with ticket sizes ranging from $10-20 million.
The partnership leverages the strong ties between Japan, Thailand, and Vietnam as well as the collaboration between CP Group, DBJ, and SSI, which will add value to portfolio companies.
“Our new fund will focus on larger deal sizes than previous SSIAM funds. A special feature of the VGIF fund is to create post-investment value for the [investee] business. This will be through the combination of the strengths of the general partners (GPs) such as DBJ’s financial capacity and the experiences of CP Group in agriculture, manufacturing and retail chain,” said Nguyen Duc Minh, SSIAM’s Investment Director.
The launch of the fund is well-timed as Vietnam is emerging as one of the most dynamic countries in Southeast Asia, having tamed the COVID-19 pandemic and also clocking stable economic growth. The country’s GDP is forecast to grow at 6 per cent annually until 2023, and Vietnam is primed to be among the top 20 global economies by 2060, according to SSI.
The country’s PE market in recent years has attracted investors. Private enterprises, too, consider PE as a relatively good capital mobilisation channel, according to Minh.
Established in 2007, SSIAM is a one-member limited liability company wholly-owned by SSI Securities. The firm had assets under management of $196 million as of August 31, 2020.
The firm is raising $100 million for its third fund in partnership with Japan’s Daiwa Securities Group. The new vehicle follows the $40 million Daiwa-SSIAM Fund II set up in 2016. Its first $30-million private equity vehicle, DSCAP-SSIAM Vietnam Growth Investment, was set up in 2009.
The Bangkok-based CP Group, meanwhile, is one of the world’s largest global food groups and manufacturers. Founded in 1921, its total enterprise value exceeds $150 billion. The company describes itself as having eight business lines with investments in 21 countries to date.
Mercuria, the third general partner of the VGIF fund, is an investment company with the major shareholders being DBJ, Itochu Corporation and Sumitomo Mitsui Trust Bank. The Japanese fund management company has an AUM of about $2 billion. Listed on the Tokyo Stock Exchange since 2016, the firm has managed over 10 investment funds to date.
In an interview with DealStreetAsia, Minh shares more details about the new fund as well as the private equity market in Vietnam.