VinaCapital Vietnam Opportunity planning significant private equity investment – VinaCapital Vietnam Opportunity Fund has published accounts for the year ended 30 June 2017. The NAV increased in US Dollar terms by 25.5% to USD4.73, while the share price rose by 35.5% to USD3.82. Their listed equity portfolio returned 32%, outperforming the VN Index by 12%.
VOF benefited from a number of major exits – especially sales of Direct Real Estate and operating assets – generating USD156 million in cash and receivables. These exits represented an IRR of 9.3% and an average of 1.8 times invested capital.
Within the equity portfolio, they trimmed the position in Vinamilk, which remains their largest holding. It rose by 39% over the year. Steel company, Hoa Phat, rose by 54%. VietJet Air, which they bought pre IPO, has seen its stock price rise by 41% since listing in February. It has overtaken Vietnam Airlines to become the country’s largest airline.
One holding that was less successful (yet, they think, still has the potential to be quite profitable in the long-term) was International Dairy Products. Here they are attempting to take a loss-making domestic company and make it a profitable exporter. They say that, since the company was granted export licences in may, revenues have been growing month-on-month.
Over the financial year, they sold four projects, including Dai Phuoc Lotus, Danang Beach Resort, Saigon Golf, and one operating asset, delivering gross proceeds of USD126 million, at an average of 58% above NAV at the time of exit.
They tell us that they have a significant pipeline, amounting to nearly USD200 million, of private equity deals and opportunities not available to other funds and expect to close more than half of this pipeline in the coming months. This would be an aggregate investment which significantly exceeds the fund’s current cash balance, and so they would look towards taking profit in the listed equities portfolio to fund some of these private investment opportunities.
VOF : VinaCapital Vietnam Opportunity planning significant private equity investment