VietNamNet Bridge - Instead of injecting money into listed shares, foreign investment funds are now paying more attention to private equities.

 

At VinaCapital’s investment conference held last October, participants heard that the most profitable investment item made by VOF (Vietnam Opportunity Fund), one of three closed end funds managed by VinaCapital, is one in private equities.

The profit of the investments in private equities was reported at 9.9 percent, much higher than the 0.8 percent profit gained from listed shares, 4.5 percent from hotels and 4.6 percent from bonds. 

Meanwhile, the investments in real estate and overseas listed shares brought losses of 10 percent and 3 percent, respectively.

Private equities also were the most profitable investments for VOF for 3-5 years, with the average profitability of 24.7 percent and 20.6 percent, respectively. The rates were 15.3 percent and 9.8 percent for listed shares.

Since its establishment in 2005, investments in private equities have brought gross profit of $23 million.

Andy Ho, managing director of VOF, said VOF would focus on two things 1) the business fields that serve the domestic market, especially food and beverage, and 2)  private equities and OTC shares.

Not only VinaCapital, but other veteran funds in Vietnam like Mekong Capital, Dragon Capital, Saigon Asset Management (SAM), and newcomers like Welkin and AIF (from Hong Kong, which poured money into Mon Hue (Hue dishes) Restaurant and Com Express, also show special attention to private equities, especially in the fields of food & beverage and pharmacy, and in the fields which make essential products.

Mekong Capital, for example, after successfully opening a new fund – Mekong Enterprise Fund III (MEF III) in May 2015 with $87.4 million – has stated it will focus on the fields of retail, restaurants, consumer goods and services.

Mekong Capital is well known as an investor in unlisted stakes which has gained successes with Vietnam Azeala Fund, Mekong Enterprise Fund (MEF) and Mekong Enterprise Fund II (MEF II). 

The other is SAM which succeeded with the latest fund raising in 2007. Louis Nguyen, managing director of SAM, which now manages Vietnam Equity Holding (VEH), and Vietnam Property Holding listed on Stuttgart bourse, said SAM plans to focus on four major investment fields – private equities, food & beverage, pharmacy and smarthomes.

Louis Nguyen said SAM was confidentabout new investment items, including one in an enterprise making Phu Quoc fish sauce bearing the Red Boat brand, one in the My Chau medicine distribution chain and a Sabeco beer distribution company in the US.

“Why not invest in business fields which will see a big impact from the TPP?” he said.

NCDT