Daiwa and Saigon Securities set up Vietnam fund

Nov 25, 2009

The fund will invest in high-growth companies and hopes to raise $100 million-plus in assets.

Daiwa SMBC Capital and SSI Asset Management (SSI AM), a subsidiary of Saigon Securities in Ho Chi Minh City, have set up an unlisted share investment fund targeting high-growth companies in Vietnam.

The Cayman Islands-registered Vietnam Growth Investment Fund is scheduled to launch next month with ¥800 million ($9.1 million) and ultimately aims to raise ¥5 billion to ¥10 billion.

It will be jointly managed by Daiwa SMBC Capital and SSI AM, which has Vnd3 trillion ($168 million) in assets under management. The fund will invest in high-growth companies related to domestic-demand expansion and consumption, and which have the potential to form partnerships with Japanese companies.

Vietnam is a young and fast-growing country with a population of 85 million, of which the average age is 26, says Daiwa. It enjoys one of the highest economic growth rates in Asia and is expanding its presence among emerging countries as a prime candidate for a China-plus-one strategy, adds the Japanese firm.

Thanks to the rapid improvement of platforms for unlisted-share transactions, such as the launch of the Upcom over-the-counter market in June, private equity investments in Vietnam are becoming increasingly attractive, adds Daiwa.

Daiwa Securities and Saigon Securities signed an agreement in June last year, under which they work as strategic partners on business opportunities related to Vietnam.

Daiwa Institute of Research has been supporting Saigon Securities on a joint research project on the Vietnamese market and a trainee programme for young analysts. In addition, Daiwa Institute of Research has, since July, been providing IT consulting services for Saigon Securities' next-generation main system.

SSI AM is not the only domestic firm to be planning new funds. Following its appointment of a new chief investment officer in September, Ho Chi Minh City-based Saigon Asset Management said it would launch "highly differentiated" investment funds focusing on equities and real estate in Vietnam.

Meanwhile, other large international players appear to be expanding in the country. For example, Prudential Vietnam Fund Management Company in July added Alan Morton as a director in its private equity team in Ho Chi Minh City.