VinaCapital is launching a new fund, Vietnam Infrastructure Limited (VIL), dedicated to investment in Vietnam’s rapidly growing infrastructure sector.
VinaCapital is launching a new fund, Vietnam Infrastructure Limited (VIL), dedicated to investment in Vietnam’s rapidly growing infrastructure sector.
VIL is seeking to raise USD 200 million in its first fundraising exercise, which will commence in May 2007. The company will seek admission to the AIM market of the London Stock Exchange.
Against the backdrop of rapid urbanization, market liberalizing government reforms, and recent WTO entry, Vietnam’s economy is expected to sustain its current high GDP growth. However, rapid growth over the last decade has placed increasing strain on the country’s ageing infrastructure with demand fast outstripping supply.
According to the World Bank, Vietnam will need a projected USD 140 billion in infrastructure investment over the next five years. However, the government’s ability to meet these infrastructure needs is limited, and this presents an attractive opportunity for the private sector, including VIL, to become strategic investors in the emerging infrastructure sector.
VIL’s mandate is to invest much needed capital in Vietnam’s infrastructure framework, through a portfolio of infrastructure assets in key economic regions. The Company will be Vietnam’s first, fully dedicated fund to invest in this rapidly growing asset class.
VIL will focus on four key industries: energy, transport, water and telecommunications. The Company will target a number of different types of investments, including existing infrastructure projects that require additional investment; distressed assets; brownfield and greenfield developments; state-owned assets that are being privatized; and listed companies.
VIL seeks to achieve target total net returns of approximately 20% per annum from investment to exit. The Company has already identified a number of potential investments.
William Lean, Managing Director of VinaCapital’s Infrastructure Group, said:’We believe infrastructure is key to maintaining the sustainability of Vietnam’s dynamic economic growth. The demand for infrastructure investment has created attractive opportunities for the private sector to become strategic investors in this asset class. The Government of Vietnam also recognises this need for private sector participation and has put in place the necessary framework. VinaCapital already has a substantial pipeline of potential infrastructure projects covering the key economic and tourism regions in Vietnam. We are very excited about the launch of Vietnam’s first, wholly-dedicated Infrastructure fund, and we look forward to investing in this rapidly growing asset class.’
VinaCapital Group is an investment house and fund manager with significant experience in the emerging Vietnamese market. The firm leverages its experience and strategic relationships with global investors to create and deliver investment products, strategic financing, mergers and acquisitions services for a broad range of industries in Vietnam.
VinaCapital’s objective is to create and realise value for its investors and clients. VinaCapital manages the USD 784 million Vietnam Opportunity Fund Limited, an AIM-traded investment company (symbol VOF.L), as well as the USD 595 million AIM-traded investment company, VinaLand Limited, (symbol VNL.L), which focuses on the key growth segments in Vietnam’s emerging real estate market. The firm has also recently launched a USD 50 million private venture capital fund, DFJ VinaCapital L.P., to invest in Vietnam’s emerging technology companies.
VinaCapital also acts as the South East Asia office for its sister company, Pacific Alliance Group (PAG). PAG manages the AIM-traded Pacific Alliance Asia Opportunity Fund Limited and ARC Capital Holdings Limited.
