Hunters And Discoveries: VC And PE In Vietnam's Financial Turmoil

Vietnam, Hu Zhiming.

Taxis are clearly divided into two categories: towing coachmen and old three wheeled vehicles. This is the old district where tourists are headed to Hu Zhiming, where the more known name is "Xigong". The other type of driver is dressed in neat cars, mostly Mercedes Benz and Porsche, which are investors.

It is only this year that luxury taxi business is getting worse and worse.

A large proportion of these investors are VC and PE investors.

As one of the world's emerging market countries, Vietnam was once a favorite place for VC and PE.

At the time of last year, 9 of 10 people wearing suits in a room were related to VC/PE, according to an investment bank in Hanoi.

From the end of 2007, Vietnam's once booming stock market began to slumped. By June, it had fallen from the highest point to more than 1000 points to less than 400 points.

This is a major blow to the private equity market.

According to the data provided by AVCJ, the fund invested in Vietnam in the first half of 2008 raised a total of $425 million, less than the 1/3 of last year.

At that time, we regret to quit too early, but now we see a lot of psychological balance. "

The Cube fund, which is responsible for Vietnam's investment in Alexix, has also been regretted that it missed the last 30% increase in the Vietnamese stock index last year.

The $1 billion alternative investment fund, which includes private equity funds, real estate and hedge funds, has been one of the most active PE in Vietnam since 2005.

Cube currently has two real estate businesses in Vietnam, including Portfolio.

Alexix believes that in the medium to long term, they are still optimistic about Vietnam's opportunities.

In terms of short-term investments, "the forced sale of capital markets and liquidity reasons" and "substantial increase in interest rates or currency depreciation" are the biggest opportunities.

"The financial crisis in Vietnam will not prevent PE and VC from continuing to pay attention to this country," said Vincent Pun, director of AVCJ research department in Hongkong. "In the long run, I am optimistic about the development of the private equity market in this country."

Hunters

Despite the old Chinese saying, crisis means danger and opportunity coexist.

But Chen Shan (a pseudonym) and his fund decided to choose to wait and see.

At the end of last year, Chen Shan went to Vietnam to see a food processing enterprise.

He is a local fund at home, "currently manages nearly 2 billion yuan renminbi fund", their main investment projects are in the domestic, but also starts to dabble in overseas investment.

Chen Shan said that although the company's historical performance is very good, "but we still feel too risky."

Although the rapid rise in domestic food prices in Vietnam is a good thing, the price of raw materials in food manufacturing enterprises is also rising.

Since March 2008, Vietnam's grain price has started to rise, which has risen from about 0.8 dollars per kilogram to the current 2 or 3 US dollars.

Paul Fletcher, a senior partner of British alliance investment, believes that such an enterprise can not invest. "If you invest in an enterprise that may not be able to cross the crisis and the cost is still rising rapidly, then there will be problems."