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Venture capital activities in the world and some lessons for Vietnam (2008) - 14

REFERENCES


1. Ministry of Science, Technology and Environment, (2001), "Research on implementing the High-Tech Development Fund in Vietnam", Ministry-level research project.

2. Prof. Dr. Le Van Tu, (2003), Stock market, Statistical Publishing House.

3. Hai Ly, (2003), "The second wave", Saigon Economic Times, p.40, issue 51, December 11, 2003.

Maybe you are interested!

4. Master Dang Thi Thu Hoai, (2003), Central Institute for Economic Management, “Venture investment and technology development in Vietnam. Current situation and some policy suggestions”, Institute-level scientific research topic.

5. CN Hoang Thi Hai Nhu, (2006), “Venture investment in some Asian countries and lessons for Vietnam”.

Venture capital activities in the world and some lessons for Vietnam (2008) - 14

6. Master Nguyen Hung Cuong and Master Dinh The Hien, (February 2003), “Calling for venture capital for high-tech development”, Journal of “Research and Development”, pp.25 – 28.

7. Dr. Tran Thi Thai Ha, (2003), "Venture capital and the role of government in forming the venture capital market", Journal of "Economic Research" No. 305, October 2003, pp.40-49.

8. Th.s Nguyen Nghiem Thai Minh, (March 2005), “Venture Capital”, Economic Development Magazine, pp.12 – 13.

9. Pham Kim Loan, (September 1, 2006), “The operational efficiency of FDI funds and some solutions to attract FDI capital in Ho Chi Minh City”, Finance and Monetary Magazine, pp.28-29.

10. Finance and Monetary Magazine, “Venture capital - the driving force for high-tech industrial development”.

11. Finance and Monetary Magazine, “High-tech development venture capital funds in Vietnam: Which model is suitable?”

12. William L.Megginson – The University of Oklahoma, (December 31, 2001) “Towards a global model of venture capital?”

13. AVCJ (2007 - 2008), "The 2007 Guide to Venture Capital in Asia", Asian Venture Capital Journal No.4/2008.

14. Clement K.Wang (National University of Singapore), (2005), “ Defferences in the Government structure of Venture Capital. The Singapore Venture Capital Industry.

15. Rafiq Dossani & Martin Kenney, (Califorlia University), (June 6, 2002), “Creating an environment: Developing venture capital in India”.

16. Martin Kenney/Kyonghee Han/Shoko Tanaka, (2004), “The Venture Capital industries of East Asia: A report the World bank”.

17. Seunghun Lee, Seoul National University, (2005), “Implementation of the sources of finance in the Venture Capital industry”.

18.Dr. Alok Aggarwal, Chairman, Evalueserve Inc, (August 21, 2006), “Is the Venture Capital Market in India getting overheated?”.

19. Thomas Andersson & Glenda Napier, IKED - International organization for knowledge economy and enterprise development, (September 2007), “The roles of venture capital, Global trends and Issues from a Nordic perspective”

20. David Hornik, (January 5, 2008), “Venture capital in China”, Zero2IPO Research center.

http://www.nvca.org; http://pwcmoneytree.com; http://www.evca.org; http://www.avcj.com; http://svca.com; http://cvca.com; http://www.mof.org.vn; http://www.indialines.com http://www.mekongcapital.com

http://www.idg.com.vn http://www.dragoncapital.com http://www.asiaweek.com

http://www.financeasia.com/article.aspx?CIaNID=28435&CID=15 http://www.peacesoft.net/

http://www.fundingpost.com/venturefund/venture-fund-profile.asp?fund=142

APPENDIX


APPENDIX 1: CLASSIFICATION OF MAIN OPERATING FUNDS IN VIETNAM

1. Funds invest mainly in private equity


Mekong Enterprise Fund, Ltd of Mekong Capital (2002)

Mekong Enterprise Fund II, Ltd of Mekong Capital (2006)

Funds focused on technology and venture capital

IDG Vietnam Venture Capital Fund of IDG Germany (2004)

DFJ - VinaCapital LP of VinaCapital (2006)

2. Real estate investment fund

Indochina Land Holdings of Indochina Capital (2005)

VinaLand by VinaCapital (2006)

3. Funds investing in listed stocks, joint stock companies and opportunistic investments

Vietnam Enterprise Investments Ltd. (VEIL) by Dragon Capital (1995)

PXP Vietnam Fund Ltd (2003) of PXP Vietnam Asset Management Company

Vietnam Opportunity Fund of VinaCapital (2003)

Vietnam Growth Fund Limited of Dragon Capital (2004)

Vietnam Securities Investment Fund (VF1) of Viet Fund (2004)

Vietnam Emerging Equity Fund of PXP Vietnam Asset Management Company (2005)

Finansa's Vietnam Equity Fund (2005)

Prudential Vietnam Fund Management Company (2005)

Vietnam Dragon Fund of Dragon Capital (2005)

Vietcombank 1 Fund of Vietcombank Fund Management Company (2006)

Vietnam Investment Fund of BIDV - Vietnam Partners (2006)

Vietnam Holding Limited of Vietnam Holding Asset Management Company (2006)

Vietnam Growth Fund of Korean investment trust management company (2006)

Worlwide Vietnam Fund of Korean investment trust management company (2006)

Kamm Investment Holdings of Kamm Investment Company (???)

Vina Blue Ocean Fund of Golden Bridge Financial Group (2006)

JF Vietnam Opportunities Fund by Jardine Fleming (2006)

DWS Vietnam Fund of Deutsche Bank (2006)

Blackhorse Enhanced Vietnam Inc by Blackhorse Asset Management (2007)

DWS Vietnam Fund of Deutsche Bank (2007)

JF Vietnam Opportunities Fund of Jardine Flemings (2007)

Vietnam Lotus Fund of PXP Vietnam Asset Management (2007)

Indochina Capital Vietnam Holdings of Indochina Capital (2007)

Vietnam Azalea Fund of Mekong Capital (2007)

(Source: www.Mekongcapital.com )

APPENDIX 2


INVESTMENT ACTIVITIES OF SOME FUND MANAGEMENT COMPANIES


1. Mekong Capital Investment Fund Management Company


Mekong Capital was established in 2001 by individuals with extensive experience in investment management both in Vietnam and internationally, currently managing three investment funds:

Mekong Enterprise fund ltd: is a private equity fund established in April 2002, focusing on investing mainly in well-managed private enterprises in Vietnam. The Fund's net asset value reached approximately US$37 million as of June 30, 2007. The average annual revenue growth rate of the companies in which the Fund invested was 34.5% as of December 31, 2006. At the same time, the average annual profit growth of the companies in which the Fund invested was approximately 46.9% over the same period.

Mekong Enterprise fund II ltd : this fund has a value of 50 million USD, launched in 2006, focusing mainly on manufacturing, branding, distribution and retail. The fund invests in fast-growing Vietnamese private companies, with a typical investment size of about 4 million USD.

Vietnam Azalea fund limited: is an investment fund in equitized companies with a value of 100 million USD, launched in June 2007. The fund mainly invests in

into companies that were formerly state-owned enterprises, as well as participating in stock auctions.

shares of unlisted companies, with the expected investment size typically around US$5-10 million.

With approximately 50 full-time staff in its Ho Chi Minh City and Hanoi offices, Mekong Capital has one of the largest and most experienced private equity teams in Vietnam. Most senior positions in Mekong Capital are held by Vietnamese, who are also shareholders of Mekong Capital.

Mekong Capital is an active investor that strives to add significant value to the companies it invests in. In particular, the fund supports construction companies.

management team, improved financial reporting systems and increased operational efficiency - all of which are aimed at faster growth and successful listing of companies' shares on the stock exchange.

Investment target: Mekong Capital focuses on investing mainly in companies related to manufacturing, branding, distribution and retail. Therefore, Mekong Capital develops core competencies in areas that help create value for these groups of companies, such as: Six Sigma, Lean manufacturing, brand management, sales management, information collection, activity-based costing, production planning, production management, material requirements planning, etc. This also reflects the experience of Mekong Capital's team members, many of whom have senior management experience at multinational companies in Vietnam.

It can be seen that Mekong Capital is a quite successful investment fund and has contributed a lot to the development of enterprises. However, according to the general definition, Mekong Capital is just a normal investment fund, or a securities investment fund, not really a venture capital fund.

2. Investment activities of Dragon Capital fund

Dragon Capital is a professional investment management company that was first established in Vietnam and after a long time of being associated with the Vietnamese market, what it has gained is even more in terms of profit. Dragon Capital was established in 1994. In 1996, Dragon Capital established the VietNam Enterprise Investment LTD (VEIL) fund with a capital of only 16 million USD, which has now increased to 500 million USD. In the group of stocks that VEIL owns, there are leading names in the Vietnamese business world such as Sacombank and Vietnam Electronics and Refrigeration Engineering Corporation. Sacombank's shares have increased in price at least 5 times since VEIL bought shares of this bank in 2000. The total value of ACB bank shares owned by VEIL has increased 10 times, from 8 million USD to 80 million USD within 10 years from 1996 to present. VEIL's banking investments account for one-third of the fund's total assets. In addition to financial lenders, VEIL's preferred investment targets include insurance, transportation, healthcare, natural resources and manufacturing companies.

consumer goods business. The value of 24% of shares in Vietnam Electronics and Refrigeration Corporation owned by VEIL increased 5-6 times in the period from 1997-2006. VEIL has a profit margin of up to 88% since the beginning of the year after failing in the first six years of participating in the Vietnamese stock market. At that time, Scriven's fund lost up to 1/3 of its total assets. Now, Dragon Capital - the No. 1 securities investment firm - after the Government in Vietnam is managing assets worth up to 860 million USD, including shares of more than half of the companies listed on the exchange, which is only 6 years old.

In addition to the above items, Dragon Capital also operates the Vietnam Growth Fund Ltd. (260 million USD) and Vietnam Dragon Fund (100 million USD) with total asset value of about 1 billion USD. It can also be seen that in the investment portfolios of investment funds under the management of Dragon Capital, the "risky" nature of the investment items is not very clear. Mr. Dominic Scriven himself also stated that the Vietnamese market is not really attractive and trustworthy for investment funds to carry out risky investment projects, so it is difficult to say that these are real venture capital funds, but only semantically.

3. Investment activities of Vina Capital fund

Vina Capital is a professional fund management company, one of the leading investment management units in the UK (100% invested capital from British Virgin Islands of the United Kingdom). Until mid-2006, Vina Capital only managed 2 funds, VietNam Opportunity Fund (VOF) and Vina Land, but up to now, it has increased to 6 funds with total assets of about 2 billion USD.

Vietnam Opportunity Fund: This fund is holding a capital of 839 million USD, the most active fund in Vietnam today.

VinaLand: Real estate investment fund, holding capital of 633 million USD, established to invest in opportunities in the real estate business. The fund has been listed on the London Stock Exchange.

Vietnam Infrastructure: Currently holding assets of up to 401 million USD, established with diversified investment goals such as infrastructure, infrastructure-related assets in Vietnam and Southeast Asian countries.

DFJ VinaCapital LP (DFJV) is a venture capital fund specializing in providing capital and investing in newly established private companies in the fields of information technology such as Internet, media communications, Wireless, Software, software outsourcing, semiconductors, infrastructure, and life sciences.

Corporate Finance: Specializes in investing in finance.

Real Estate: specializes in providing services on real estate development and inspection during the investment process, and is present in a number of important investment projects in Vietnam.

Among Vina Capital's investment funds, VOF is the most effective investment fund in Vietnam, and DFJ Vina Capital is a fund with the true nature of a venture capital fund specializing in investing in newly established private enterprises in the information technology sector.

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