Dragon Capital to list flagship strategy in London
It’s not only Vietnam’s new prime minister who is looking to strengthen international ties for the country. As Nguyen Xuan Phuc welcomed US president Barack Obama to Hanoi this week, Ho Chi Minh City-based Dragon Capital yesterday announced the planned listing of its flagship fund in London.
The asset manager is to launch the 20-year-old, $850 million strategy, Vietnam Enterprise Investments (VEIL), on the Main Market of the London Stock Exchange (LSE).
Launched in 1995, VEIL is the largest and longest-running fund focused on Vietnam, with a net asset value of around $850 million, making up most of Dragon Capital’s $1.3 billion in AUM. The firm expects the London listing to create a more transparent and liquid market in the strategy’s shares, widening potential ownership and attracting greater analyst coverage.
On June 21, 2016, Dragon will hold an EGM for the approval of certain matters relating to the proposed listing. It wants to see admission to trading of VEIL’s shares on the LSE in early July.
Post-listing, the fund house expects the strategy to become a key vehicle for exposure to Vietnam given its size and equity-only investment mandate, appealing to both institutional and retail investors. About half of VEIL’s net asset value is accounted for by stocks which are at their foreign ownership limits and cannot otherwise be accessed by foreign investors, noted the firm.
Dragon also cited Vietnam’s “attractive growth profile”, noting that GDP rose 6.7% last year. “There are strong FDI inflows and a young, expanding and well-educated workforce,” it added in a statement. “The country also stands to benefit from the recent Free Trade Agreement with the EU and the US-led Trans-Pacific Partnership.”
Still, Vietnam is not short of challenges. The voting-in of the new government under premier Nguyen has come as Vietnam readies itself for foreign tensions, particularly tensions over territorial disputes with China in the South China Sea. It is no surprise that the country’s new administration is on an overseas charm offensive.