VinaCapital Vietnam Opportunity planning significant private equity investment

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

2 Responses

  1. SC Minh

    That’s fantastic listed equity performance. Where can I buy just the listed equity exposure? Or should I be concerned that they are going to sell outperforming assets to further invest in a private equity portfolio which can only have been up around 10% over the same period. Has anyone ever asked them to explain their logic?

  2. While the QuotedData which works with The London Economic, can’t offer opinions in a retail domain due to regulatory reasons (until next year as these rules relax), however here we can offer you fact and useful information so you can decide what you want. What you are looking at is a London listed investment company, which you probably know. Due to foreign ownership rules in Vietnam, the high volatile nature of single stocks in these sort of markets, the often illiquid nature of the stocks and limited access to foreign shares on some domestic trading platforms, they can offer a nice way to get exposure to this exciting market. There are 3 London listed Vietnamese funds, you can research them here: If that still doesn’t help, assuming you are not a professional investor (which maybe incorrect) what we advise is getting your, advisor if you have one, to ask us and we can then legally advise him or her. Either way enjoy our research by subscribing for free and enjoy reading The London Economic.

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