Today the world of the Pitt Plus 3 Program turned upside down. Instead of classes in the morning and a site visit in the afternoon, our schedule was totally flipped – site visit in the morning and classes in the afternoon. What did this mean for us? An extra 2 hours in the morning before our day began – truly a blessing.

Our morning company visit was with VinaCapital, one of the largest asset management groups in Vietnam. Bear with me, because this blog is going to be an engineer who has never taken one business or economics class trying to talk about some pretty complicated business stuff… I’m going to try my best though!

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Firstly, what does VinaCapital do in Vietnam? They match investors with companies and products in need of investment to help these investors maximize their returns. Right now, combining all their different funds, this company manages 1.8 billion USD in investments.   The main areas they invest in are real estate and infrastructure, although their portfolio is super diverse (how am I doing with this business lingo huh?). Their stock used to be listed on the London AIM market, the alternative investment market in London, but they recently moved to the main London Stock exchange to attract clients that were more in line with their interests and target audiences. They are listed in London rather than Ho Chi Minh or Hanoi for the stock exchange because they are valued higher in this market, and, again, it attracts the type of investors they want to work with more easily.

The government places certain restrictions on the work that VinaCaptial does. For example, there is a 20% tax on business acquisition in HCMC, and there is also a limit to how much foreign investors can own in any particular company. But VinaCapital and other businesses like it have found ways around it – namely, using offshore shell companies to purchase the land in Vietnam (and go through the arduous process of registering it only once), and then selling the offshore company instead of the actual company in Vietnam to give buyers the company they want while making VinaCapital a profit and avoiding the heavy taxes of the region. But, it should be mentioned that while the government places high taxes on some things like business acquisition, they place lower taxes on other sectors to promote growth. For example, there is a 0.05% tax on real estate investment in Vietnam. They also encourage investment by making minimum investments only 100,000 dong (about $5 USD) for certain projects/products.

There is private stock ownership in Vietnam but because many people in Vietnam still culturally distrust the banking system (or really any system where they give their money to other people and leave it outside their control), a large portion of the country still deals exclusively in cash, so VinaCapital has recently been trying to host outreach events to teach people about the concept of saving and savings accounts, as well as thinking about their retirements, since Vietnam is advancing like a western culture and may soon not be able to support the old Asian ideal of children taking care of their parents when they become old and need assistance.

In addition to the company, VinaCapital also runs a foundation which helps people with congestive heart disease to get treatment that would otherwise be inaccessible. Though the foundation is run by the same people as the company, the CIO was very clear to mention in his talk with us that they are kept separate due to different investors participating in each, as well as different goals – maximizing profit for investors versus maximizing social impact for investors.


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