London Asia expands to Vietnam and Mongolia

With an eye on cross-border opportunities, AIM-listed China-focused merchant bank London Asia is expanding operations to Vietnam and Mongolia, and raising new country-dedicated funds.

China-focused merchant bank London Asia is planning to launch funds for Vietnam as well as Mongolia with respective local partners, as part of its strategy to manage a range of Asia-focused funds.

The two countries border China, and represent markets that are likely to benefit from the country’s rapid economic growth, Simon Littlewood, chief executive of London Asia said.

London Asia has entered into a memorandum of understanding with Vietcombank Fund Management (VCBF), a local fund management joint-venture business, to launch a fund for investment in Vietnam, according to a statement.

Headed by Lim Boh Soon, VCBF boasts of a team with significant experience of investing in South East Asia, and manages an onshore Vietnam-focused fund.

The proposed new fund will invest in Vietnamese businesses that are being privatised, and businesses seeking to list worldwide. It will be jointly managed by London Asia and VCBF, with the latter responsible for providing deal flow and local due diligence, and the former providing expertise in exiting and financing through international markets, according to the statement.

“Vietnam’s anticipated entry into WTO, reform of its financial and capital markets, low cost, educated workforce, and shortage of capital as a result of previous trade restrictions and rapid economic growth make it an ideal place to invest,” Littlewood said in the statement.

In Mongolia, Bodi International, holding company of Mongolia’s Golomt Bank, the second largest bank by assets and largest insurance company, is taking a 70 percent stake in recently-formed London Asia Capital Mongolia (LACM), 60 percent in London Asia and 40 percent in local Mongolian partner BIG.

LACM was formed to explore opportunities in energy, environment, tourism, logisitics, banking, insurance, commodities and real estate in Mongolia, according to the statement. Working with Bodi, LACM intends to raise a fund to invest in pre-IPO opportunities in the region, which remains largely untapped by Western investors.

London Asia raised a £50 million (€73 million; $92 million) China-focused fund which it listed on AIM in March, and has formed strategic alliances with several Chinese government agencies.