VinaCapital: Where I Learned How Much I Didn’t Know

Hello Everybody,

Today we got to visit VinaCapital; VinaCapital is an investment firm that opened in 2003 that currently has 1.8 billion US dollars worth of shares currently. The company has several different funds which all invest in different areas, with varying degrees of liquidity. They have funds that invest in everything from development and real estate to technology/ entertainment companies to infrastructure. These areas are very wise investment areas seeing as Vietnam is experiencing colossal economic growth and the infrastructure, real estate, and companies here are racing to catch up and keep up the demand for streets, housing, and Vietnamese entertainment. VinaCapital is in charge of VinaWealth Opportunity Fund (VOF), VinaCapital L.P., and Vietnam Infrastructure Limited.

Two of the funds that VinaCapital are in charge of have started to wind down in recent months, meaning that they will come to a close soon. One of them needs to be closed because investors wanted to see liquidity in the fund and it was illiquid and the other invested in too many different things at once so it did not work out. Vinacapital also faces a challenge just because of its location, and the laws of Vietnam. Vietnam can be a very difficult place for new foreign investors who need to fill out lots of paperwork and then figure out how to get connections to get the paperwork through, and there are laws about the percentage of shares a foreigner can own of a development company (30%). Both of these things make it easier for them to invest in VinaCapital than starting their own foreign investments seeing as VinaCapital was not incorporated in Vietnam so its technically an international company.

VinaCapital faces a looming challenge with local investment, seeing how the majority of citizens do not understand or trust financial institutions and keep all their money in cash. There is also no concept of savings or pension funds set up here (at least not in the way we know it in the US). They are currently working to educate Vietnamese people about investment with assistance from the government in order to help them better save which would also benefit them in the long run.

A lot of today just taught me how little I know about investment, with me understanding about 75% of the stuff they were saying about the funds, which just told me I needed to get educated about this kind of stuff too. Maybe I should try and read those white papers VinaCapital is writing about investment for the Vietnamese people.

Until tomorrow,

Audrey Case

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