Business
Warburg Pincus: "Vietnam a big draw for global investor"
Warburg Pincus is relishing its opportunities in Vietnam as the economy grows and capital markets develop, said Jeffrey Perlman, Southeast Asia chief of the private equity firm to Reuters.
"It's a market that we think there's a lot of opportunity in," quoted Perlman in an interview with Reuters on March 22. "Four, five years ago, even in Vietnam there wasn't an understanding of what was private equity and what it will do to businesses."
Vietnam's emergence as a large manufacturing destination next to China helped the Southeast Asian nation's economy grow at 6.8% last year, the strongest since 2010, Reuters reported.The growth is rapidly building up a huge middle class that is boosting consumer spending in a country of about 100 million.
Its stock index VNI has risen 20% this year, the best performance in Southeast Asia, after surging by 50% last year.
Perlman said the growth in Vietnam's capital markets to US$200 billion in value from some US$35 billion five years ago, was a big draw for global investors, and he expected local regulators to bring in more reforms to develop the markets.
Warburg is the largest private equity investor in Vietnam, which has also seen sizeable investments from rivals KKR & Co. and TPG.
The firm, with US$40 billion assets under management, invested US$300 million in Vincom Retail, the largest shopping mall operator in the country which is also a subsidiary of domestic property giant Vingroup. Further, its highly successful $740-million listing on the Ho Chi Minh Stock Exchange last November was the largest-ever IPO in Vietnam, helping Warbug more than double its investment.
This month, Warburg announced a US$370 million-investment in Vietnam's Techcombank, marking the largest-ever private equity investment in Vietnam to day,
Perlman cited the forecasted huge growth as reason behind the firm recent investment, "two-thirds of the population do not have a bank account, while more than 90% do not have access to credit cards."
Though company valuations were high across many markets globally, Vietnam's strong growth prospects stood out. "You have an ability to potentially pay a fuller price when there's actually growth underlying the investment," Perlman said. He did not specify how much more Warburg plans to invest in the country or identify potential targets.
Warburg Pincus started investing in Southeast Asia in 2013 with Vietnam as its maiden market. Since then, the Private equity firm has invested in seven companies in the region, including Vincom Retail, Lodgis Hospitality, ARA Asset Management, Go-Jek, NWP Retail and Trax.
Warburg Pincus is relishing its opportunities in Vietnam.
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Its stock index VNI has risen 20% this year, the best performance in Southeast Asia, after surging by 50% last year.
Perlman said the growth in Vietnam's capital markets to US$200 billion in value from some US$35 billion five years ago, was a big draw for global investors, and he expected local regulators to bring in more reforms to develop the markets.
Warburg is the largest private equity investor in Vietnam, which has also seen sizeable investments from rivals KKR & Co. and TPG.
The firm, with US$40 billion assets under management, invested US$300 million in Vincom Retail, the largest shopping mall operator in the country which is also a subsidiary of domestic property giant Vingroup. Further, its highly successful $740-million listing on the Ho Chi Minh Stock Exchange last November was the largest-ever IPO in Vietnam, helping Warbug more than double its investment.
This month, Warburg announced a US$370 million-investment in Vietnam's Techcombank, marking the largest-ever private equity investment in Vietnam to day,
Perlman cited the forecasted huge growth as reason behind the firm recent investment, "two-thirds of the population do not have a bank account, while more than 90% do not have access to credit cards."
Though company valuations were high across many markets globally, Vietnam's strong growth prospects stood out. "You have an ability to potentially pay a fuller price when there's actually growth underlying the investment," Perlman said. He did not specify how much more Warburg plans to invest in the country or identify potential targets.
Warburg Pincus started investing in Southeast Asia in 2013 with Vietnam as its maiden market. Since then, the Private equity firm has invested in seven companies in the region, including Vincom Retail, Lodgis Hospitality, ARA Asset Management, Go-Jek, NWP Retail and Trax.
