Private equity investment gathers pace in Vietnam
Private equity funds have been gathering pace in Vietnam to capitalize on what the fast-growing economy, with an almost 100 million population, can offer.
The World Bank’s investment arm IFC recently said that it has proposed to invest $45 million in VN Green Holdings Pte. Ltd, a Vietnam-focused, Singapore-based dedicated renewable energy platform founded in 2020 and wholly owned by Dragon Capital Group.
VN Green currently owns the 49.5 megawatt-peak Quang Tri solar power plant in Quang Tri province on Vietnam’s central coast. The developer’s strategy is to own at least 300 MW of renewables capacity in the nation by 2024 through the acquisition of operating wind and solar power projects and by developing its own projects.
As private equity (PE) investment is part of IFC’s portfolio, the global investor works to increase the involvement of PE funds in emerging markets. Earlier in April, IFC named US national Thomas Jacobs as its new country manager for the Mekong region, covering Vietnam, Cambodia, and Laos. He will focus on supporting the private sector in driving inclusive and sustainable economic growth.
IFC said on April 12 that it subscribed to VND1 trillion (about $44 million) bonds to be issued by Nam Long Investment Corporation, a leading housing developer in Vietnam. The proceeds will be used by Nam Long for the second phase of the Waterpoint housing project, part of a broader integrated township development that will feature green public spaces, sporting, school, university, medical facilities, as well as transport, retail and offices.
A few days prior, IFC said it mulled over a $73 million investment for this bond subscription to finance the project, located in Long An province’s Ben Luc district.
For another township, Singapore-based private equity firm CMIA Capital Partners is leading the investment estimated at $1.1 billion in a 1,018-hectare mixed-use township in Ho Chi Minh City, Vietnam’s economic hub.
Surbana Jurong Group – an urban, infrastructure and managed services consulting firm and a wholly-owned subsidiary of Singapore’s State investor Temasek Holdings – is the development manager of the project in Trung An commune, Cu Chi district.
The Ho Chi Minh City Agri Food-Tech Eco Township, under a memorandum of understanding (MoU) CMIA signed with the district’s administration on April 12, will be a new integrated regional urban center for the economic hub. The township will have an industry focus on food science and technology, including food processing and manufacturing, product development, quality assurance and quality control, research, and regulation.
The township will be home to 100,000 residents, have a 200-hectare food science and technology industrial park and contain a myriad of recreational spaces and amenities. It is expected to generate revenues of about $2 billion annually and create stable jobs for more than 20,000 employees, helping uplift the city’s GDP per capita towards the $8,500 by 2025 target set by the metropolitan administration.
Meanwhile, Singapore-based CapitaLand’s wholly owned lodging business unit, Ascott Limited, entered into two agreements to acquire two properties in Hanoi and Paris for about S$210 million ($154.3 million) last year. The acquisition was made through the Ascott Serviced Residence Global Fund, Ascott’s private equity fund with Qatar Investment Authority, Qatar’s $300 billion sovereign wealth fund.
The acquisition in the Vietnamese capital is the 364-unit Somerset Metropolitan West Hanoi, just 10 minutes’ drive to Vietnam National Convention Center, while Noi Bai International Airport is a 30-minute drive away. The property, acquired on a turnkey basis, is expected to open in 2024, CapitaLand said.
“Our acquisition of these two prime properties in France and Vietnam is in line with Ascott’s ambition to expand our global lodging business,” Kevin Goh, CapitaLand’s CEO for Lodging, said when announcing the deals last June. He did not disclose the separate acquisition price for each property.
In the auto industry, Vietnam’s largest conglomerate Vingroup has reportedly been in talks with global private equity firms and other investors for funding for its automobile arm VinFast, whose ambitions include challenging Tesla in making electric vehicles.
The Vietnamese carmaker signed an MoU with the government of North Carolina in the U.S. in late March for the establishment of a $4 billion manufacturing plant in the state. VinFast intends to invest $2 billion in the project’s phase 1.
Vietnam’s PE market continued to achieve a new peak in terms of deal numbers in 2020, with a total of 59 worth $1.14 billion, a Grant Thornton Vietnam report shows. Grant Thornton has not published similar numbers for 2021, which saw the Vietnamese economy expand 2.58%, a little slower than 2.91% in 2020. Such slow growth resulted from turbulence and uncertainties caused by the Covid-19 pandemic.
Bain & Company, in its Asia-Pacific Private Equity Report 2022 published in March, said the region’s PE investment value set a record $296 billion in the first half of 2021. Each country in the region set new investment highs, and deal value in Japan, Southeast Asia, and South Korea more than doubled, it said without giving details on Vietnam.
However, one of the most outstanding deals in Vietnam at that time was a $400 million investment into retail from a consortium led by Baring Private Equity Asia, one of the largest PE firms in Asia, and Chinese giant Alibaba. Masan Group – one of Vietnam’s largest private conglomerates – announced the completion of the deal last July, saying the investment was for a 5.5% stake in The CrownX, the group’s integrated consumer retail arm.
In education, American global investment giant KKR, which sponsors funds that invest in private equity, credit, and real assets, started to invest $100 million in EQuest, a leading educational services provider in Vietnam, last June. In 2020, KKR and Temasek Holdings led a consortium pouring $650 million into Vingroup’s property developer Vinhomes.
In healthcare, HCMC-based USM Healthcare, Vietnam’s only coronary stent developer and manufacturer announced on April 12 that EastBridge Partners, a PE firm headquartered in Seoul, had invested $30 million into the Vietnamese company to help it expand production capacity and in research and development.
Vietnam still largely relies on expensive imports for its medical equipment needs and USM wants to serve lower to middle-income patients with high quality yet affordable medical devices, said USM Healthcare founder and CEO Boi Lam. “We see EastBridge Partners as a partner who could help us achieve these objectives and support overseas expansion with their resources and networks in Korea, Southeast Asia, and the Middle East,” she said.
Pediatric clinic operator Nhi Dong, also based in the city, completed last August a Series A funding round from BDA Capital Partners and Vietnamese securities firm Thien Viet. The company, which then operated 14 clinics in the megacity, did not disclose how much it raised. The funding round followed the clinic operator’s November 2020 completion of its pre-Series A financing from a consortium of international investors from Hong Kong, Japan, Singapore, the Philippines, Vietnam, and Europe, with investor names undisclosed.
Earlier last year, Singapore-based PE fund ABC World Asia led a $24 million Series B funding round at Kim Dental, one of Vietnam’s leading dental system operators.
Louis Nguyen, Chairman and CEO of Saigon Asset Management (SAM), said leading investment funds in Vietnam will continue to seek opportunities in the market, one of Asia’s fastest-growing economies.
“In the long term, the country continues to be one of the world’s fastest-growing economies, averaging 6-7% annually. By and large, the Vietnamese population is young, and they have a lot of time to work, live, and to shop,” he told a financial talk show on Vietnam Television in late March.
“Vietnam is located at a very good location for global logistics networks. The country also has the necessary materials for manufacturing. As for me, the most important issue is the market ensures transparency and integrity for investors.”
- Read More
Indonesia to develop 3 million more hectares of rice fields
The Indonesian government is working to implement a program to develop 3 million hectares of new rice fields to strengthen the country's food resilience amid global challenges and increasing population demands, national news agency Antara reported.
Southeast Asia - Wed, October 30, 2024 | 9:24 pm GMT+7
Singapore’s digital economy thriving
Singapore’s digital economy accounted for 17.7% of the island state's GDP in 2023, up from 17.3% in the previous year, according to its Infocomm Media Development Authority (IMDA).
Southeast Asia - Wed, October 30, 2024 | 9:21 pm GMT+7
Viettel, UAE’s Presight to boost Applied AI, digital transformation in Vietnam
Vietnam’s Viettel AI and the UAE’s Presight have agreed to jointly advance the development of Applied AI and digital transformation initiatives in Vietnam.
Companies - Wed, October 30, 2024 | 8:30 pm GMT+7
Vietnam utility EVN to build $277 mln transmission line to import power from China
State utility Vietnam Electricity (EVN) has got the go head to build the VND7,010 billion ($277.2 million), 500 kV Lao Cai-Vinh Yen line for transmission in the northwestern region and to import power from China.
Energy - Wed, October 30, 2024 | 8:09 pm GMT+7
Jack Ma-invested fund unloads Vietnam holdings worth $130 mln in Q3
China’s Tianhong Vietnam Market Stock Initiated Securities Investment Fund (QDII) saw outflows of around RMB930 million ($130.4 million) in the July-September quarter.
Finance - Wed, October 30, 2024 | 4:53 pm GMT+7
Private lender HDBank reports strong profit growth in 9 months
Ho Chi Minh City-based private creditor HDBank's pre-tax profit surged 47% year-on-year to VND12.65 trillion ($499.6 million) in the first nine months of this year.
Banking - Wed, October 30, 2024 | 4:42 pm GMT+7
Real estate M&As gather pace as local firms struggle with capital insufficiency, restructuring: experts
2024 is considered a vibrant year for mergers and acquisitions (M&A) in Vietnam’s real estate sector, as domestic property companies still face challenges related to capital and restructuring, according to experts.
Real Estate - Wed, October 30, 2024 | 4:14 pm GMT+7
Vietnam conglomerate Vingroup, UAE partner seek to build $3.5 bln data center
Vietnam’s leading conglomerate Vingroup and the Middle East-focused Benya Technologies will jointly explore opportunities to invest in a $3.5 billion data center in Vietnam.
Industries - Wed, October 30, 2024 | 3:43 pm GMT+7
Commonwealth Bank of Australia further sells 10% stake in Vietnam bank VIB
The Commonwealth Bank of Australia (CBA) has sold a further 10% stake in Vietnam International Commercial Joint Stock Bank (VIB).
Banking - Wed, October 30, 2024 | 1:17 pm GMT+7
Saudi Aramco seeks to invest in Vietnam, partner with Petrovietnam
State-owned Saudi Arabian Oil Group (Aramco), the world’s largest oil producer, is eyeing to invest in petrochemical-oil refining and petroleum distribution in Vietnam, said president and CEO Amin Hassan Nasser.
Energy - Wed, October 30, 2024 | 11:01 am GMT+7
Emirates seeks to expand presence in Vietnam
Emirates, the flagship carrier of the UAE, has signed two separate memorandums of understanding (MoUs) with Vietnam Airlines and Vietjet as part of the airline's efforts to expand its footprint in Vietnam.
Companies - Wed, October 30, 2024 | 10:02 am GMT+7
Brightening outlook for Vietnam steelmakers with real estate recovery, infrastructure development: analysts
While Q3 results among Vietnam’s steelmakers are a mixed bag of gradual recovery and continued losses, there are several factors pointing to a brighter outlook for the industry, analysts say.
Industries - Wed, October 30, 2024 | 8:00 am GMT+7
Former National Assembly General Secretary faces disciplinary action
The Party Central Committee’s Inspection Commission has proposed competent authorities take disciplinary action against Bui Van Cuong, who stepped down last week as the National Assembly’s General Secretary.
Politics - Tue, October 29, 2024 | 11:10 pm GMT+7
Indonesia aims to become Southeast Asia's EV production hub
Indonesia is actively seeking to boost investment in a bid to establish itself as a center for electric vehicle (EV) and battery production in Southeast Asia.
Southeast Asia - Tue, October 29, 2024 | 10:38 pm GMT+7
Singapore trials autonomous vehicles on public roads for cargo transportation
Singapore’s FairPrice Group (FPG) recently announced that it has become the first organization in the country to receive approval from the Land Transport Authority (LTA) for the final stages of trials to use autonomous vehicles (AVs) on public roads for cargo transportation.
Southeast Asia - Tue, October 29, 2024 | 10:37 pm GMT+7
Malaysia promotes green energy transition
The Malaysian Government has increased the National Energy Transition Facility Fund allocation to over RM300 million ($60.80 million) in the 2025 budget from only RM100 million this year.
Southeast Asia - Tue, October 29, 2024 | 10:35 pm GMT+7
- Consulting
-
Remove roadblocks to lure foreign investment into Vietnam: HSBC exec
-
Rethinking resilience: How typhoon Yagi redefines supply chain strategies in northern Vietnam
-
In trade and investment, ASEAN and China are better together
-
AI can be a game changer for Vietnam tourism
-
Investment opportunities in LNG-to-power projects in Vietnam
-
Pepper prices 2024: will the dream of 'black gold' repeat?