Private equity in love with Vietnam
Despite its strained economy, Vietnam has emerged as the new darling for private equity and venture capital firms in ASEAN as a primary investment destination ahead of Singapore, Thailand and Indonesia, according to Ernst & Young’s 2013 outlook report on Asia-Pacific region.
One fifth of private-equity investors surveyed in a Collier Capital December 2012 report said they are turning to ASEAN markets such as Vietnam amid concerns that rewards in China are getting smaller with higher risks. The focus on Vietnam underscores foreign investors’ attraction to its growing middle class and a population where more than half of the nation’s 90 million people are under the age of 35, one of the youngest demographics in the world.
Vietnam is a country “that needs private equity more than anywhere else,” said Kelvin Lee, Ernst & Young’s transactions leader for Vietnam. “They are looking for capital as the financial sector is doing quite poorly.”
Apart from large investment firms already active in Vietnam, such as Indochina Capital and Saigon Securities, more firms are turning their attention to the country, among them TPG Capital, one of the largest private equity investment firms globally with around $50 billion under management.
TPG Growth fund, which manages $4 billion, is currently scouting for “emergent” companies in Vietnam with growth potential. The company previously invested in Masan Group and FPT Corp, both large private sector companies in Vietnam. Masan Group is also a target for US-based private equity investor KKR.
Vietnam’s economy is forecast to expand 5.5 per cent this year, from an average of 7.3 per cent annually since 2000. The country’s economy is currently struggling with an overindebted banking sector and has started a privatisation drive for its large state-run corporations.
[caption id="attachment_7883" align="alignleft" width="300"] Vietnam has a high potential in the consumer segment due to its young population and rising spending power[/caption] Despite its strained economy, Vietnam has emerged as the new darling for private equity and venture capital firms in ASEAN as a primary investment destination ahead of Singapore, Thailand and Indonesia, according to Ernst & Young’s 2013 outlook report on Asia-Pacific region. One fifth of private-equity investors surveyed in a Collier Capital December 2012 report said they are turning to ASEAN markets such as Vietnam amid concerns that rewards in China are getting smaller with higher risks. The...
Despite its strained economy, Vietnam has emerged as the new darling for private equity and venture capital firms in ASEAN as a primary investment destination ahead of Singapore, Thailand and Indonesia, according to Ernst & Young’s 2013 outlook report on Asia-Pacific region.
One fifth of private-equity investors surveyed in a Collier Capital December 2012 report said they are turning to ASEAN markets such as Vietnam amid concerns that rewards in China are getting smaller with higher risks. The focus on Vietnam underscores foreign investors’ attraction to its growing middle class and a population where more than half of the nation’s 90 million people are under the age of 35, one of the youngest demographics in the world.
Vietnam is a country “that needs private equity more than anywhere else,” said Kelvin Lee, Ernst & Young’s transactions leader for Vietnam. “They are looking for capital as the financial sector is doing quite poorly.”
Apart from large investment firms already active in Vietnam, such as Indochina Capital and Saigon Securities, more firms are turning their attention to the country, among them TPG Capital, one of the largest private equity investment firms globally with around $50 billion under management.
TPG Growth fund, which manages $4 billion, is currently scouting for “emergent” companies in Vietnam with growth potential. The company previously invested in Masan Group and FPT Corp, both large private sector companies in Vietnam. Masan Group is also a target for US-based private equity investor KKR.
Vietnam’s economy is forecast to expand 5.5 per cent this year, from an average of 7.3 per cent annually since 2000. The country’s economy is currently struggling with an overindebted banking sector and has started a privatisation drive for its large state-run corporations.
