KKR, VinaCapital, and Mekong Capital’s Big Private Equity Exits in 2016
This article was originally posted on Deal Street Asia by Nguyen Thi Bich Ngoc.
International and domestic Vietnam-focused funds rolled out their plays during the year even as the region sported a handful of significant liquidation events or exits, a sign of maturity in the investment space. VinaCapital announced investments into wood-making firm An Cuong and Thai Hoa Hospital, while Mekong Capital marked first two financing rounds by its new fourth fund – in restaurant chain Wrap&Roll and logistics company ABA Corporation. The World Bank Group’s International Finance Corporation and Standard Chartered Private Equity also reinforced their active role in the Vietnam PE in the Vietnam PE market through investments in commercial lender TP Bank ($18.35 million), language training school VUS ($10 million), e-wallet MoMo ($25 million in the $28 million round co-funded with Goldman Sachs), and entertainment platform N Kid ($40m).
On the exit side, most of the top deals were made by domestic investors, including VinaCapital and Mekong Capital. The majority of the transactions were completed through the stock exchange.
Some major exits:
The Vietnam Azalea Fund, an investment vehicle founded in 2007 and managed by Mekong Capital, sold its entire holdings in four Vietnamese businesses in 2016. The massive divestments were explained by the fund’s lifespan, which will end in 2017.
The first full exit disclosed in the year was from tech major FPT Corporation. Beginning the investment in FPT in 2011, the April 2016 exit brought a 1.8x multiple and a net IRR of 13.2 per cent in the US dollar for Mekong Capital.
The next two exits were from two property developers, Nam Long Corporation (in June) and Intresco (in July). Vietnam Azalea Fund spent $9.1 million on a minority stake in Nam Long in 2010, while acquired 20 per cent of Intresco before selling the shares to a local architecture company.
The next two exits were from two property developers, Nam Long Corporation (in June) and Intresco (in July). Vietnam Azalea Fund spent $9.1 million on a minority stake in Nam Long in 2010, while acquired 20 per cent of Intresco before selling the shares to a local architecture company.
Information about the returns of these two divestments were not available, while local media reported, citing Chris Freund, CEO of the Vietnam-focused PE fund, that Intresco was not a “very successful investment”.
Later in November 2016, Mekong Capital said it had offloaded 100 per cent shareholding in Phu Nhuan Jewelry. Prior to that announcement, it had revealed a partial exit from the jeweler, which earned it a gross return multiple of 2.2x on 3 million shares sold.
Vietnam Azalea Fund’s portfolio is left with agribusiness Loc Troi Group and pharmacy firm Traphaco, following these exits.
