Today’s blog will be rather short since we primarily spent most of the day visiting VinaCapital. However, I hope you all learn something about the company and a bit more about my career prospects as today established an idea that I have finally come to terms with: things do not always go according to plan, but that is ok.
VinaCapital is one of the largest asset management firms in Vietnam, with a portfolio consisting of $1.8 billion in assets under management. With Vietnam currently transforming into a developed country resulting in a tiger economy, now is the optimal time for firms like VinaCapital to ride this wave and grow with it. The firm consists of a strong team of investors of various backgrounds all covering the many fields that VinaCapital handles: capital markets, private equity, fixed income, venture capital, real estate, and infrastructure. Essentially, they “beg for money onshore and offshore to survive,” raising enough capital to invest in early stage growth businesses as a means to gain a positive return on investments.
The main three closed-ended funds that VinaCapital trades on the London Stock Exchange are as followed: VinaCapital Vietnam Opportunity Fund Ltd. (VOF), VinaLand Ltd. (VNL), and Vietnam Infrastructure Ltd. (VNI). VOF is a multi-asset strategy fund that is targeted at international markets. VNL is a real-estate focused fund with operating assets in residential, retail, and hospitality sectors. As for VNI, it is an infrastructure focused fund with development assets. VinaCapital also has a joint venture with Draper Fisher Jurvetson (DFJ), a venture capital firm in Menlo Park, with $30 million in funds called DFJ VinaCapital LP (DFJV). DFJV targets most of its investments at the international market, with investments in: technology, ecommerce, IOT, and entertainment companies. DFJV claims itself to be “sector agnostic”, investing in any early stage companies with great potential for growth.
Like any other publicly traded company in America, the same follows for companies here in Vietnam. Those that are publicly traded are listed on either the Ho Chi Minh, Hanoi, or primarily the London Stock Exchanges. How VinaCapital’s funds work are that when a company’s stock in VinaCapital’s portfolio rises, then a percentage of the gain goes back to the fund, leading to more capital to be invested in future companies. From what I understand, there are no limits to trades or how much the share prices of the funds can change in any given period. Thus, it is in VinaCapital’s best interests to diversify their portfolio by funding many companies. Now this process repeats over and over again until a company shows no more promise where the funds will be withdraw and invested in someplace else. It is obviously more complicated than that, but that’s the gist of it and the extent of what I understood from my visit to VinaCapital.
As for ownership of stock in Vietnam, the majority of stocks are listed as OTC and are found on the stock exchanges. With that said, there are also privately held companies that are not publicly traded. These companies are invested through private equity such as what VinaCapital offers.
VinaCapital is also partnered with VinaCapital Foundation to help raise money for children with congenital heart disease. A surprising fact we learned is that approximately 16,000 children are born each year with the disease and about 85% suffer and die before the age of 18. As a result, VinaCapital has acted as the anchor donor in the Foundation. They cover all the administrative costs, address human rights with programs designed to educate the community about the disease, and offer strong support by providing any further resources needed.
One of the main goals of VinaCapital being located in Vietnam is educating Vietnamese citizens about investing. Many Vietnamese are unaware about investing and actually have this false idea that putting their money in banks is bad. Some Vietnamese still store their money under their beds and even go as to the extreme of stockpiling on gold. With Vietnam’s economy steadily growing, it has led to an unfortunate income gap among the Vietnamese. This will certainly cause social and political unrest and is why VinaCapital needs to step in and help the Vietnamese with their money.
Now what did I personally take away from my visit to VinaCapital? To be honest, the main reason I wanted to major in Finance originally was because I wanted to become an investment banker at a big name asset management firm. But after talking with individuals in the field during the school year and listening closely to the representatives at VinaCapital, they all confirmed the feeling I had deep inside that it was never the right choice for me. There are many reasons why I had this sudden realization to change my career path, but just hearing what the people at VinaCapital did truthfully was not interesting to me. If I had to look at the big picture, I do not see myself working happily in this profession for a long duration—which I value a great deal. In order words, it is back to the drawing board for me as I consider what to do with my life. Maybe being a foreign officer is where I should pivot to next?
Until next time friends
-TK
