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Vietnam's VinaCapital reveals $626m private equity pipeline

Flagship Vietnam Opportunity Fund eyes 21 deals across range of sectors

Since its inception in 2003, VinaCapital has seen its private equity portfolio outperform the Ho Chi Minh Stock Index by 10.5 per cent.     © Reuters

HANOI -- Vietnam-based asset management firm VinaCapital is evaluating 21 private equity deals worth a total of $626 million, according to the latest monthly update by its flagship Vietnam Opportunity Fund.

About 43 per cent of the deals being evaluated are in the consumer discretionary sector. The Vietnam Opportunity Fund is also looking at investments in healthcare, consumer staples, materials, industrial and information technology.

Amid a declining stock market, the fund -- which invests across a spectrum of asset classes -- expects the weight of its private equity portfolio to net asset value to grow to about a quarter, from 14.5 per cent as of the end of September.

Public equities accounted for 66 per cent of the fund's $920.8-million net asset value as of end-September. Meanwhile, private equity was the only asset class to register a consistent increase in net asset value since 2017 for the fund.

The fund recently announced it was leading a consortium to invest $21.4 million in local packaging company Ngoc Nghia.

"Over the past year or so, we have evaluated more than 100 potential private equity investments and narrowed the pipeline to six companies with the greatest potential," the fund said in the report, adding that it would likely announce several more deals in the coming months.

Since its inception in 2003, VinaCapital has seen its private equity portfolio outperform the Ho Chi Minh Stock Index by 10.5 per cent. The fund manager has fully realized 28 private equity investments at a gross internal rate of return of 20 per cent during the period.

Its divestments this year include budget carrier Vietjet, which resulted in an internal rate of return of 87.6 per cent and a 2.1 times multiple after holding the stake for three years, according to the report. The fund had invested $38.4 million in Vietjet.

Other private equity portfolio companies of VinaCapital, which has $3.3 billion in assets under management, include private health care system Tam Tri Medical, wood furniture manufacturer An Cuong Wood Working, and real estate groups CenLand and Ricons.

DealStreetAsia is a financial news site based in Singapore focused on corporate investment activity in Southeast Asia and India. Nikkei recently acquired a majority stake in the company.

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