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Vietnam offers a unique opportunity for highly attractive and sustainable long-term investments
Vietnam - A Country On The Move Vietnam is one of the fastest growing developing economies in the world. It is going through a far-reaching transformation from an inward-looking planned economy to a market-based and opened one. Vietnam’s economic growth rate has been among the highest in the world in recent years, expanding annually at 7-8.5 percent, while industrial production has been growing at around 14-15 percent a year. The country is now aiming for middle-income country status by 2010. In 1986, the Vietnamese Government approved a broad economic reform package called “Doi Moi” (renovation) that introduced market reforms and dramatically improved Vietnam’s business climate. The country averaged around 8% annual gross domestic product (GDP) growth from 1990 to 1997 and 6.5% from 1998-2003. From 2004 to 2007, GDP grew over 8% annually. The shift away from a centrally planned economy to a more market-oriented economic model improved the quality of life for many Vietnamese. Per capita income, $220 in 1994, rose to $726 in 2006 with a related reduction in the share of the population living in acute poverty.
Vietnam formally acceded to the WTO as its 150th member on January 11, 2007. To meet the obligations of WTO membership, Vietnam revised nearly all of its trade and investment laws and guiding regulations. As a result, foreign investors and those seeking to sell goods and services to the increasingly affluent Vietnamese population will benefit from the improved legislative framework and lower trade barriers. Local firms that have heretofore enjoyed a range of protections, meanwhile, will experience increased competition. After 1989, Vietnam liberalized trade, devalued its exchange rate to increase exports, and embarked on a policy of regional and international economic re-integration. Vietnam has demonstrated its commitment to trade liberalization in recent years, and integration with the world economy has become one of the cornerstones of its reform program. Vietnam has locked in its intention to create a more competitive and open economy by committing to several comprehensive international trade agreements, including the Association of Southeast Asian Nations (ASEAN), Free Trade Area (AFTA) and the U.S. - Vietnam Bilateral Trade Agreement (BTA). Vietnam’s accession to the World Trade Organization will further integrate Vietnam into the global economy.
As a result of these reforms, exports expanded significantly, growing by as much as 20%-30% in some years. In 2007, exports accounted for 78% of GDP. Imports have also grown rapidly, and Vietnam has a significant trade deficit of $12.8 billion in 2007. Vietnam’s total external debt, accounting for 30.2% of GDP in 2006, was estimated at around $18.4 billion.
Thanks to the BTA signing and WTO accession, the pace of investment flows has accelerated. By the end of 2007, Vietnam had attracted $83.1 billion in foreign investment commitments from 8,590 projects since the country was opened to foreign investment in 1988, of which $29.236 billion has been disbursed.
Vietnam strongly encourages foreign investment as part of its development strategy, and the government is committed to improving the business and investment climate. The continued ability to attract overseas capital, through foreign direct investment (FDI) and official development assistance (ODA) are integral parts of the Government of Vietnam’s (GVN) growth target of 8 percent GDP for 2008.
Vietnam’s financial system is in the early stages of reform. One hundred and fifty three companies are listed in the Ho Chi Minh Stock Exchange and 138 in the Hanoi Securities Trading Center, with a joint capitalization of $13 billion as of 30 June 2008. The majority of listed firms are former SOEs that have undergone partial privatization (equitization). In 2008 and 2009, the GVN plans to conduct initial public offerings (IPOs) of a number of large SOEs, however the initial timeline for SOE equitization has slowed since the market cooled halfway through 2007, and strategic investors have become more reluctant to buy in at what they see as high share prices. Despite these setbacks, Vietnam’s stock market is increasingly becoming an attractive investment channel for foreign investors and a real source for financing.
The GVN’s most recent Five Year Plan (2006-2010) sets FDI targets of $17.5-19.5 billion in disbursements from licensed foreign investment projects and approximately $10 billion in ODA. The GVN also expects to mobilize $4.3 billion by 2010 in foreign indirect investment through bonds and shares sold overseas.
Overview
Vision
Founded in 2006 while Vietnam was experiencing dramatic growth in both social and economic fields, accompanied by an ever-accelerating global integration process, Viet Capital aims to be a constant companion to its investors on the road to prosperity.
Viet Capital was established to fully support Vietnam’s economic reform process by identifying investment opportunities and then create value for both our investors and the enterprises. We look forward to maximizing the benefits for all parties, and at the same time support the prosperity of the nation. We have harnessed a well qualified team with a common goal, a fresh perspective and a youthful vigor to take on all challenges.
With our talented pool of well-qualified and enthusiastic local professionals, VCAM’s goal is to become one of the leading asset management companies in the country. We commit to providing attractive returns at acceptable levels of risk to our investors, creating a fair and friendly working environment for our employees and fulfilling our social responsibilities. We are proud to be a domestic fund manager to manage both on-shore and off-shore money under various structures.
Mission
Strengths
Corporate Governance
Viet Capital aspires to be one of the leading asset management companies in Vietnam. A truly home grown team managing funds to generate attractive and superior returns for investors with controlled and managed risks, and providing value added services to investee companies.
A young, dynamic home-grown team with a well entrenched and extensive local network to tap into a wide array of target investment companies covering a broad spectrum of industries.
At VCAM we firmly believe that companies which are transparent and well governed, operating in a responsible and sustainable way should have the right culture, attitudes and mechanisms in place to support both their long-term health and enhance shareholder value.
We will at all times maintain the highest level of professionalism consistent with international standards. Viet Capital aims to be a socially responsible organization both to employees and society and will continuously contribute to worthy community development projects.
We are creative, independent thinkers with a deep understanding of the Vietnamese market which means that we can offer the best solutions tailored to every investment need. Global reach with strong international connections. We have developed the skills necessary to invest in a broad range of assets as a result of understanding our clients’ exact needs.
Confidence in the integrity and quality of good management is essential if we are to maintain long-term relationships with companies. We aim to make positive contribution towards the evolution of good corporate governance by taking an active interest in the companies in which we invest and by protecting the rights of our investors.
Investment Strategy • Investments are prioritized in industries which aim to improve living standards and add value to Vietnamese society. Investments in unhealthy industries particularly those which negatively affect public health and the environment are avoided. The skills of our investment professionals and the resources of the organization are deployed to exploit these dynamic investment opportunities. We are therefore committed to:
We believe that through an active approach to investing we can best achieve our investment objective of consistently meeting our clients’ performance expectations. • Our mission is to capture the opportunities presented by the open, dynamic and fast growing economy of Vietnam • Pursuing a long-term and fundamental investment strategy, the Fund seeks to buy shares of companies which posses sound and sustainable competitive advantages in high growth industries at reasonable price. This strategy secures long-term attractive returns surpassing accompanied risks.
• Multi-disciplinary, methodical and systematic processes that can identify and assess opportunities for profitable investment. All investments will be subject to comprehensive and in depth due diligence and evaluation • An innovative approach that draws upon a variety of asset management techniques to deliver tailored investment solutions to our clients. A disciplined and rigorous approach to evaluating deal opportunities and implementing investments • Assets under management will be allocated into a widely diversified portfolio to achieve the goal of optimizing its profit within an acceptable risk ratio. • We believe in close partnerships with our people. Leveraging our international and industrial relationship, VCAM plays not only the role of financial investor but also acts as a business partner to its investee companies, adding more value through consulting and bringing potential industrial partners together. The motto of our investment guidelines and process is: Safety, Stability and Effectiveness.
Viet Capital aims to be a transparent, well-governed and socially responsible company
Investment Process • A combination of top-down and bottom-up approaches applied to screening and analyzing process to ensure superior stock picking • Being aware of conducting business in a young emerging market, we consider Risk Analysis the core of our investment process. Thorough and comprehensive due diligence is conducted for every investment. Site visits and multiple meetings with target’s stakeholders and industrial experts are mandatory steps to complete the investment process • After investment, a close and comprehensive watch is conducted rigorously to provide an effective risk-alerting and to enable a timely action for every investment.
Our Services Viet Capital Asset Management (VCAM) provides a wide range of professional asset management services and products for institutional investors and high net worth individuals who are interested in investment activities in Vietnam. With a large pool of available resources and our depth of local experience and proven ability to provide investment solutions, VCAM is dedicated to serving the needs of investors onshore and offshore:
Investment Management
Portfolio Management
A business that creates and manages funds or other investment products for our investors, VCAM manages assets on behalf of investors based on the specified investment policy. The product could take a form of a mutual fund or member fund, either fully diversified or sectorfocused, with a predetermined strategy.
VCAM provides advisory wealth management services and products to institution and/or individuals. VCAM is dedicated to helping clients achieve all their goals by adopting a customized solution/approach.
Viet Capital aims to be a constant companion to its investors and investees on the road to prosperity
Our Funds
Viet Capital Fund – VCF Viet Capital Fund (VCF), established in early 2007, is a limited partnership opportunistic investment fund with an initial fund size of approximately US$ 50 million. As the primary objective is to achieve a high risk-adjusted return, VCF is selectively investing in leading firms with excellent management, solid fundamentals and sustainable growth at reasonable prices. VCF defines itself as always looking for win-win solutions by creating value for all of its business partners. Fund size
VND 800 billion (as of Jul 31, 2008)
Investment Strategy 90% invested in medium and long term investment and the remainder for short term and trading purposes. Sector focus
All key sectors with good potential and fast growth in Vietnam (not invest directly in real estate and infrastructure).
Investment criteria Investing in truly outstanding businesses with top notch management at an attractive price. Investment size
No single investment may exceed 15% of NAV and no more than 30% may be invested into a group or related group.
Auditor
KPMG
Custodian
HSBC
Fund Director
Linh Nguyen
Viet Capital Healthcare Fund (VCHF) VCHF is the domestic limited partnership fund licensed by the Vietnam State Securities Commission with the primary objective of achieving medium to long-term (3-5 years) capital appreciation and providing an attractive level of income (from interest and dividends) through investment in listed and unlisted companies, assets and other healthcare investment opportunities in Vietnam. Fund size
VND 500 billion (as of Jan 15, 2008)
Investment Strategy 70% invested in mid and long term projects; the remainder invested for short term trading purposes. Sector Focus
• Pharmaceutical companies • Hospitals • High-tech clinics • Function food companies • Companies which manufacture medical devices
Investment Criteria High potential health care investment opportunities and social mission with competitive returns. Investment Size
No single investment may exceed 15% of the Net Asset Value of the fund.
Auditor
KPMG
Custodian
HSBC
Fund Director
Tuan Pham
Our Team
With a talented pool of internationally qualified local professionals, our goal is to become one of the leading asset management companies in the country
Ms. Phuong Nguyen Chairperson
Mr. Linh Nguyen Managing Director - Viet Capital Fund
Ms Phuong Nguyen was appointed Chairperson of Viet Capital from the first day of establishment and assumed all strategic management responsibility for the firm. Her role includes delivering on the company’s mission of partnering with people and businesses to help realize Viet Capital’s full potential. In her early professional career, she served as Deputy CFO of Holcim (Vietnam) Ltd, a Swiss multinational conglomerate. Prior to founding Viet Capital, she was chosen as Investment Director by Vietnam Holding, a Swiss-based fund dedicated to opportunistic investments in Vietnam and listed on London’s AIM. Phuong received her BA in Business Administration (Banking and Finance) at the National Economics University, then MBA in Financial Management from the International University in Geneva, Switzerland. She is now a DBA candidate at the School of Management, Asian Institute of Technology.
Mr Linh Nguyen supervises overall business operations at the firm and leads the flagship fund VCF. Prior to founding Viet Capital, he worked for Mekong Housing Bank (MHB-Vietnam) where he was principally involved in the setting up of a securities firm. Previously, he also successfully managed a family office in Ho Chi Minh City and was a lecturer in International Banking at the HCM Banking University. Linh has gained extensive experience in the finance industry, i.e. having held several senior management positions such as Finance Director of Bax Global, International US forwarder based in Vietnam, and for Vietnam Lubricant & Chemical, a Vietnamese leader in the lubricants industry. He earned an MBA from the Asian Institute of Technology (AIT), Thailand and has a BA in Finance & Banking from Ho Chi Minh Economic University.
Mr. Viet Cung Managing Director - Head of Research
Mr. Tuan Pham Managing Director - Viet Capital Healthcare Fund
Mr Viet Cung provides day-to-day leadership for the whole Investment Research team which is closely involved in all Viet Capital projects. Prior to founding Viet Capital, he was the Chief Analyst and one of the Investment Directors of Vietnam Holding, a Swissbased fund. He was also one of the first professionals of the Ho Chi Minh City Securities Trading Center when it was established in 1998. Since 2002, he has been a lecturer at the National Economic University’s Business School, teaching corporate finance, securities market and valuations. As a founder of the PSV Consulting firm, he has worked with Vietnam’s two leading securities companies. Viet holds a Masters Degree in Finance from the University of Sydney and a BS in Food Processing Engineering from the Technological Institute in Odessa, in the Ukraine, formerly in the Soviet Union.
Besides playing the main role of leading VCHF as Fund Director, Mr Tuan Pham is also in charge of all offshore investment funds. He previously held the position of Chief Financial Officer at VinaCapital, having had overall responsibilities for finance, human resources and operations in the company. He was also involved in the Company’s strategies and business development, investor relations, fund raising activities and represented VinaCapital on several Boards of Investees’ companies. In addition, Tuan also has more than 10 years of experience in taxation and assurance in PricewaterhouseCoopers (Vietnam and Australia) and Dutch Lady Vietnam as Tax Manager and Business Assurance Manager, respectively. He earned a Bachelor degree in Accounting from Sydney University of Technology, Australia and is currently a member of the Australian CPA.
Mr. Tu Pham Finance Director
Ms. Hanh Do Hanoi Chief Representative cum. PR Manager
Mr Tu Pham is in charge of financial performance, back office operations and Human Resource Management. He has joined Viet Capital directly from Citigroup where he served as Senior Relationship Manager of the Commercial Banking Group, in charge of FDI – the Rest of Asia Desk. Before that, he was Head of the SME Desk, also in Commercial Banking for HSBC Banking Group. For the first ten years of his professional career, Tu held various positions such as Finance Manager, Business Planning & Analysis Manager, Finance Controller, Chief Accountant for IKEA B.V, Bristol Myers Squibb, Novartis S.A and Toshiba, including 2-years working full time in Singapore and other Asian countries. Tu holds a BA of Science from Hochiminh City University of Economics with a focus on Corporate Finance since 1996.
Ms Hanh Do leads the Hanoi representative office and public relations for the whole company. Prior to joining Viet Capital, she was the Economic Growth Specialist overseeing United States economic growth projects with the U.S. Agency for International Development (USAID). In this role, she was involved in managing and administering a range of economic development projects supporting the country’s economic reform process. Prior to this, she had years of experience in the macro-economic and public administration areas, serving with Ministry of Industry, Ministry of Planning and Investment and the United Nations Development Program (UNDP). Hanh holds a Bachelor degree in International Business from Hanoi Foreign Trade University and a MBA from the University of Southern California for Professional Studies.
Contact Us Head Office Saigon Tower, Suite 1701, 29 Le Duan Street, District 1, Hochiminh City, Vietnam Tel: +84 8 3823 9909 Fax: +84 8 3824 6329 Email: info@vietcapital.com.vn www.vietcapital.com.vn Hanoi Representative Office C/o: Saigon Tower, Suite 1701, 29 Le Duan Street, District 1, Hochiminh City, Vietnam Tel: +84 8 3823 9909 Fax: +84 8 3824 6329 Email: info@vietcapital.com.vn
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