VinaCapital has $120m for investment alongside new $200m PE fund

Vietnam-based fund manager VinaCapital said it had around $120 million in kitty to re-invest into either private or publicly traded companies, alongside the new $200 million private equity fund it is planning to raise.

“This has been part of our ongoing strategy since inception,” Andy Ho, CIO of the investment firm, said in an email interaction.

The money will primarily be invested in the domestic market, given VinaCapital’s strong presence in Vietnam and the country’s ample opportunities.

However, Andy said the company will also explore and review opportunities in other regions such as Myanmar and Cambodia.

In Vietnam, VinaCapital manages three closed-end funds trading on the London Stock Exchange, including multi-asset class fund Vietnam Opportunity Fund Limited, real estate fund VinaLand Limited and infrastructure vehicle Vietnam Infrastructure Limited.

It also co-manages the $32 million DFJ VinaCapital venture capital fund, which has been fully invested, in partnership with Draper Fisher Jurvetson. In addition, the $1.5 billion AUM firm is a major stakeholder at locally incorporated fund management company VinaWealth.

VinaCapital’s private equity investment portfolio mostly come from the Vietnam Opportunity Fund (VOF), which last year had put in $9 million in Thai Hoa Hospital and $30 million in woodworking firm An Cuong.

VinaCapital had earlier told this portal it would launch a new PE investment vehicle with a corpus of over $200 million, while contemplating 20 strategic exits for VOF. Last year, the fund scored exits from DHG Pharmaceutical, and an undisclosed asset for a reported $100 million.

Vietnam continues to be one of the world’s fastest growing markets with 6.2 per cent GDP growth in 2016 and an expected 6.5 per cent in 2017. The outlook for the local economy is quite optimistic, according to the CIO, coupled with a manageable level of inflation, increasing income and strong foreign investment appetite.

Vietnam will likely encounter some uncertainties in 2017 due to trade policies from the new US president as well as Brexit and similar actions from other European nations. However, market watchers say that Vietnam will still be yielding a lot of opportunities in terms of both private and listed equity.

“We have seen a tremendous amount of foreign interest in Vietnam, and are working on creating new products that provide access to some of the lesser known, more interesting opportunities in the market today,” VinaCapital said in its recent market commentary.

With regard to private equity, the local economic growth is expected to generate tremendous opportunities in this sector. Companies in the consumer discretionary, construction and materials, and healthcare industries are generally targeted by PE funds.

VOF also makes investment in the privatization of Vietnamese state-run companies, with holdings in some major businesses like Vinamilk and the Airports Corporation of Vietnam.

“What we would like to see in equitisations are larger stakes being sold to the public, which would make them more attractive to investors like VinaCapital and increase liquidity. The process for buying into SOEs also needs to be simpler and more transparent,” Ho said.

Meanwhile, in the stock market, privatisation and listings will contribute to increasing liquidity, which is a significant factor in MSCI’s determining whether the country should move to emerging market status, Ho added.

The lower valuations of many Vietnamese listed companies, compared to more advanced markets, combined with a strong growth outlook for the country, will continue to make the market attractive, despite the recent outflows of money from emerging and frontier markets to the US.

Also read:

VinaCapital exits three projects, clocks over $100m net proceeds

VinaCapital vehicle completes exit from SEATH

Warburg Pincus, VinaCapital in $300m hospitality JV, targeting SE Asia

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.