The Vietnam Opportunity Fund (VOF), a closed-ended fund trading on LondonÆs Alternative Investment Market (Aim), has more than doubled its size in a share placement.

ôThereÆs going to be a lot of privatisations in the next six to nine months,ö says Don Lam, managing partner and co-founder of VinaCapital Investment Management, an investment bank and the VOFÆs manager in Ho Chi Minh City. ôWe need to be there for it.ö He notes that the biggest insurance company, telephone operator and bank are all slated to be listed, with potential market capitalisations of over $1 billion each.

The VOF is among a handful of existing Vietnam funds cashing in on the expected IPO rush on the countryÆs two young exchanges. PXP Vietnam Asset Management, also based in HCMC, recently launched its third domestic equities fund. Another local investment group, Horizon Capital Partners, is reportedly launching its first fund as well.

The government is set to end a 50% corporate income tax break that had been enacted in 2000 when the Ho Chi Minh City Stock Trading Centre was opened. That is leading a rush of privatisations that should markedly expand the stock marketsÆ combined capitalisation from $3.3 billion to $5 billion within the next few months.

VinaCapital launched the VOF in 2003 with $10 million. It had grown to $296 million, opening to new subscribers everytime the existing funds were fully invested, when the partners decided to seek an additional $100 million in October. The demand was huge and they increased the share-raising round to $304.6 million. The placing sold nearly 128 million new ordinary shares at $2.38 each. Lam says the VOFÆs NAV has grown 118% since inception.

The VOF attempts to capture a complete exposure to Vietnam, with 25% dedicated to private equity, 25% to real estate and 50% to public securities, over-the-counter securities and newly privatised companies. It charges fees of 2% of NAV plus 20% on returns over an 8% watermark.

VinaCapital also manages the $205 million Aim-listed VinaLand fund, a property vehicle, and the recently launched $50 million private-venture capital fund aimed at VietnamÆs technology sector.

Lam, a Vietnamese national, was a partner at PricewaterhouseCoopers focusing on corporate finance and investment banking. He set up VinaCapital with Horst Geicke, a German national whose private Hong Kong-based Geicke Group also owns and operates manufacturing plants in China.