Vinacapital sees growth opportunity in Viet Nam’s technology industry

Managing Director of VinaCapital Group, Don Lam, has said that the fund management company sees Viet Nam ’s emerging technology industry as a major growth opportunity.

Director Lam explained that “ Viet Nam has one of the world’s youngest populations, with about 70% of its population younger than 30. These young people are strongly represented the country’s rapidly growing consumer class and they are exceptionally eager to make the latest technologies part of their daily lives.”
Last October, VinaCapital teamed up with Silicon Valley ’s Draper Fisher Jurvetson (DFJ) to launch a 50 million US$ technology frontier fund. The DFJ VinaCapital L.P. seeks to invest in opportunities that complement the expertise and successful ventures of its partners in technology initiatives and to further expand Internet penetration in Viet Nam .

“By focusing on the upcoming equitisation in the media industry and fostering the development of start-up technology companies, the DFJ VinaCapital LP hopes to play a central role in the emergence of this industry,” Lam said.
Established in 2003, VinaCapital is managing the 560mio US$ Viet Nam Opportunity Fund (VOF), which is Viet Nam ’s best-performing fund in 2004, and the 205mio US$ VinaLand Fund (VNL). Both funds are currently listed on the London Stock Exchange.
Lam went on to say that VOF invests primarily in listed and OTC-traded equities, private equity, and real estate projects, and focuses on key growth areas in the domestic economy.
“We target companies with experienced management, proven business models, and attractive exit opportunities,” Lam said, adding that 2006 was VOF’s best year yet, with an annual return of 65%, and its market capitalisation nearly reaching 1 billion US$.
“We are very pleased with our performance in 2006, but see even greater opportunities in 2007,” Lam said.

Regarding Viet Nam ’s officially accession to the World Trade Organisation (WTO), Lam noted that “lower tariffs will lead to sizeable increases in foreign direct investment (FDI).”
He confirmed that the record FDI of 9.9 billion US$ in 2006 is an indication of the economy’s dynamism and attractiveness, and “full WTO membership is sure to lead to even bigger investments from abroad.”

“We have already seen the entrance of some major foreign investment banks like Deutsche Bank and Merrill Lynch, and more are bound to follow as the rest of the world sees how much Viet Nam has to offer,” Lam added.

He also noted that freer trade and greater competition will eventually lead to consolidation.
VinaCapital expects to see an increase in merger and acquisition activity, the director said. “The recent takeover of Bao Minh CMG by the Japanese insurer Dai Ichi Life is a great example of a very successful Vietnamese company drawing the attention of big foreign players who are interested in entering the Vietnamese market.”

Source: VNA