Vietnam Pioneer launches first-time fund

Vietnam Pioneer Fund is targeting $100m and has received a cornerstone investment from the International Finance Corporation.

Vietnam Pioneer Partners, a new private equity firm based in Ho Chi Minh City, has launched its maiden fund with a target of $100 million.

Vietnam Pioneer Fund has received a cornerstone investment of 20 percent of funds raised, up to a maximum of $20 million, from the International Finance Corporation (IFC). The IFC has also taken a 10 percent stake in the management company.

The fund is expected to reach a first close by Q1 2010, Viet Hung Do, Vietnam Pioneer’s executive director and co-founder, told PEI Asia in an interview, although he stressed the nature of the market made it difficult to predict with accuracy.

Vietnam Pioneer Fund is targeting investment in high growth, distressed and transformational industries in two principal types of companies: state-owned enterprises that are privatising and private companies in need of growth capital. In terms of sectors, the firm is a big believer in consumer plays like retail & distribution and consumer goods.

“The demographics support a consumer push,” said Do, pointing to the fact that of the 86 million people in the country, close to 50 percent are under the age of 25.

Other sectors to be considered are media and entertainment; financial services; energy & natural resources; healthcare and information technology.

Viet Hung Do founded Vietnam PionEER Partners with two others, Trung Ha Nguyen and Hoa Thi Dinh. All three have has been investing together as angel investors for more than 15 years.

Do’s background includes more than five years with McKinsey in France and the US. In 1997 he established the McKinsey practice in Southeast Asia through the opening of the Bangkok office. Most recently, Do co-founded and headed a Thailand-based investment management company, focusing on Thai-listed small and mid cap companies. He also sits on the board of BigC Supercenter, a Thai-listed hypermarket chain, and Lien Viet Bank.

Nguyen co-founded FPT Corporation, a Vietnamese IT and telecoms company, in 1988, becoming its CFO. In 1994 he established the Hanoi branch of the Asia Commercial Bank and managed it until he left in 1998. In recent years he has been involved in the setting up and financing of over 30 companies in Vietnam.

Dinh, a former comptroller of ACB Bank and vice-chairwoman of Thien Viet Securities, founded Galaxy Group, a Vietnamese investment consulting and public relations company, in 1994.Galaxy Studio, a subsidiary of Galaxy Group, also has extensive involvement in Vietnam’s media and entertainment industry.

Also on board as investment directors are Duy Le and Van Nga Nguyen. After five years of investment banking experience with Merrill Lynch in Frankfurt, London and Singapore, Le most recently worked as an investment manager at VinaCapital. Nguyen spent four years with the IFC from 2002 to 2005, working first as an investment officer and then business development officer. She then left to take on the role of managing director of Dong A Industry Company.

Do asserts that Vietnam Pioneer Partners wants to do more than just make good returns and says the founders of the firm are mindful of the developmental benefits their investments can bring to the country, in terms of corporate governance and business practices.

“There’s a huge difference between doing things that would make an investor like the IFC happy and doing things that would satisfy a Vietnamese entrepreneur,” he said. “Our country needs bringing into the world and cannot carry on doing things in a Vietnamese fashion.”