VinaCapital to launch Vietnam Energy Fund

The Vietnamese asset management and investment firm plans to begin raising the fund by the end of 2009. It will be Vina’s fifth fund, alongside three UK-listed and one unlisted investment fund the firm manages.

Vietnam-based asset management and investment firm VinaCapital is planning to launch a Vietnam-focused energy fund by the end of 2009, according to sources familiar with the matter.

The fund’s formation is still in progress so details about its target size and structure are not available. However, sources previously indicated that the Vietnam Energy Fund would be an unlisted, closed-end fund.

The Vietnam Energy Fund will seek to capitalise on the rapidly increasing demand for energy consumption in Vietnam that has been constrained by a shortfall in supply.

Vietnam's energy needs:
opportunity for investors

Vietnam needs to invest approximately $85 billion in power generation between now and 2015 but the government has limited funds available to meet that demand. The country also has shrinking access to Official Development Assistance from the Organisation for Economic Cooperation and Development, according to a energy investment presentation by VinaCapital.

Vietnam has been receiving more attention lately from infrastructure funds hoping to capitalise on opportunities in the Southeastern Asian country. Among the 25 emerging markets-focused funds identified by placement agent Probitas, JPMorgan’s Asian Infrastructure & Related Resources Opportunity fund and Challenger and Mitsui’s Emerging Markets Infrastructure funds will seek to make investments in the country.

The Vietnam Energy Fund would be the fifth fund managed by Vina’s investment management arm, VinaCapital Investment Management. That division houses Vina’s Vietnam Opportunity Fund, a UK-listed fund that invests across a mix of asset classes; VinaLand, a UK-listed fund dedicated to real estate opportunities in Vietnam; Vietnam Infrastructure, a UK-listed fund focused on infrastructure and related assets in Vietnam; and DFJ VinaCapital Technology Fund, a $35 million unlisted venture capital fund.

Vietnam Opportunity, VinaLand and Vietnam Infrastructure had net asset values of $662 million, $790 million and $338 million, respectively, as of 30 June 2008. All three net asset values are above the funds’ market caps.

VinaCapital was established in 2003. The firm is headquartered in Ho Chi Minh City and has offices in Hanoi, Danang and Hong Kong. It employed more than 150 investment professionals as of October 2008.