Warburg sees increasing investment opportunities in Vietnam post $1b commitment

Jeffrey Perlman, Managing Director and Head of Southeast Asia, Warburg Pincus. Photo: DEALSTREETASIA

Warburg Pincus is finding new investment targets in the consumer, banking and logistics sectors of Vietnam as its economy grows and capital markets develop, said the regional head of the private equity firm which has committed over $1 billion in Vietnam.

“It’s a market that we think there’s a lot of opportunity in,” Jeffrey Perlman, Southeast Asia chief for Warburg, told Reuters in an interview on Thursday. “Four, five years ago, even in Vietnam there wasn’t an understanding of what was private equity and what it will do to businesses.”

Vietnam‘s emergence as a large manufacturing destination next to China helped the Southeast Asian nation’s economy grow at 6.8 percent last year, the strongest since 2010. The growth is rapidly building up a huge middle class that is boosting consumer spending in a country of about 100 million.

Its stock index has risen 20 percent this year, the best performance in Southeast Asia, after surging by 50 percent last year.

Perlman said the growth in Vietnam‘s capital markets to $200 billion in value from some $35 billion five years ago, was a big draw for global investors, and he expected local regulators to bring in more reforms to develop the markets.

Warburg is the largest private equity investor in Vietnam, which has also seen sizeable investments from rivals KKR & Co. and TPG.

Warburg‘s first Southeast Asian investment was in Vietnamese shopping mall owner Vincom Retail, in which its consortium invested $300 million. Vincom Retail’s shareholders raised over $700 million in November, valuing it at $3.4 billion, helping Warburg more than double its investment.

This month, Warburg announced a $370 million investment in Vietnam Technological and Commercial Joint Stock Bank, a sector Perlman said was set for huge growth.

“You have two-thirds of the population who don’t have a bank account. More than 90 percent don’t have access to credit cards. There is a huge runway in front,” he said.

Though company valuations were high across many markets globally, Vietnam‘s strong growth prospects stood out. “You have an ability to potentially pay a fuller price when there’s actually growth underlying the investment,” Perlman said. He did not specify how much more Warburg plans to invest in the country or identify potential targets.

Warburg Pincus‘ current seven portfolio companies in Southeast Asia, include a venture with Vietnamese property developer Becamex, Indonesian ride-hailing firm Go-Jek and Singapore-based ARA Asset Management.

Reuters

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.