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

Global private equity investment firm Warburg Pincus has teamed up with Vietnam-based major asset management company VinaCapital to form a hospitality joint venture spanning development, acquisitions and operations across Southeast Asia, the companies said in a joint statement on November 17.

VinaCapital’s founder Don Lam has come on board the joint venture as a partner.

Both firms have committed up to $300 million into the hospitality platform, while other assets will also be contributed, including the entire stake of Serenity Holding, a company previously co-owned by Lam and Marco van Aggele, as well as select resort and city hotels in Vietnam.

Serenity Holding is a major player in the local hotel management segment, operating specialised boutique resorts and upscale city hotels in the country.

“The JV is founded on a common vision to become the pre-eminent hotel platform in Vietnam with a target to expand into other leading hospitality markets in Southeast Asia. The long-term goal is to capture the outsized growth in tourist arrivals, especially from China, to the region over the next five to 10 years,” the statement said.

It is estimated that China’s outbound tourists will grow by over 100 million over the next 10 years to over 220 million, with ASEAN countries being the biggest beneficiary with estimated arrivals from China expected to quadruple from approximately 10 million to 40 million during this period.

The new venture is mandated to grow its regional asset base through acquiring, repositioning and enhancing well-located hotels in key tier-1 cities, and developing luxury resorts in top tourism destinations across Southeast Asia.

Due to the highly fragmented state of the region’s hotel market, the JV will also seek acquisitions and create alliance with other prominent hotel management companies and platforms to further enhance its management capability and expand its brand and asset coverage, the companies added.

The companies indicated that the JV platform would potentially walk the IPO path.

“We are excited to work with Warburg Pincus, a best-in-class private equity firm with deep experience in Asia, to build the leading hotel platform in Southeast Asia. The platform is off to a strong start and we look forward to contributing our strong acquisition capabilities and local resources to build a hospitality platform of the highest quality and scale in the region,” said Lam.

In Vietnam, Warburg Pincus, the PE firm with $40 billion asset under management, invested $300 million in Vincom Retail, the largest shopping mall operator which is also a subsidiary of domestic property giant Vingroup.

It had earlier said that Vietnam would be a key focus in Southeast Asia for the company.

Meanwhile, VinaCapital has deployed a diversified asset base in Vietnam, from listed equity, private equity, real estate projects to infrastructure.

The Ho Chi Minh City-headquartered firm has made 16 hospitality investments over the last 10 years, which involved more than $220m of equity investment.

It has invested in and managed a variety of properties, from city center trophy estates and business hotels, coastal resorts and residential communities, to golf courses and serviced apartments. Six out of the top 10 hotels in Vietnam have been developed or owned by the fund manager.

Jeffrey Perlman, managing director and head of Southeast Asia of Warburg Pincus, praised the proven track record of VinaCapital, which coupled with Warburg Pincus’ regional and global expertise will help the JV expand to tap the tremendously growing hospitality and tourism industry in Southeast Asia.

“Benefiting from the country’s rich tourism resources, the hospitality market in Vietnam and others across the region have been going through an important transition period driven by strong international tourist arrivals, a rapidly growing domestic middle class, pro-growth policies and accelerating infrastructure build-up. The connectivity in the key urban and resort destinations have also been greatly enhanced, coupled with the explosion of low-cost carriers which has fundamentally changed how people travel in the region,” said the statement.

Warburg Pincus has put more than $2.5 billion into 20 companies and projects in Asia, including Guangzhou R&F, e-Shang Redwood Group, Red Star Macalline, D&J China and Mofang Apartments in China; Nirvana Wastu Pritama (Indonesia) in Southeast Asia; and a joint venture with Embassy Group in India.

Additionally, Warburg Pincus has invested in three leading hotel companies in the region including 7 Days Inn, China Jinmao and Lemon Tree Hotels.

Also read:

Vietnam is a long term strategic market: Warburg Pincus

Exclusive: Hospitality assets to lead growth in Vietnam’s real estate sector: Don Lam, VinaCapital

Warburg Pincus consortium adds $100m as follow-on investment in Vincom Retail

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.