The Vietnam focussed investment fund and funds management industries have experienced somewhat of a roller coaster ride during the last decade. The Vietnam investment boom which reached its peak in 2006/2007 has, partially as a result of the global financial crisis, given way to a somewhat more circumspect outlook, and there is an element of wariness amongst the investment community in respect of the years ahead.
2012 saw the shareholders of some of the major closed-ended foreign investment funds vote to extend the terms of those funds for additional years, rather than liquidate the funds in a less favourable divestment climate. Conversely, a significant number of local investment funds have either been wound up, begun the process of winding up, or come under the direct administration of the State Securities Commission.
In early 2013, there were a number of fund-raising initiatives either underway or expected, both foreign and domestic. Notwithstanding the cooling of investor sentiment relating to Vietnam in 2012, cautious optimism is beginning to spread.
Recent legislative changes in Vietnam have enabled the establishment in Vietnam of closed-ended funds. In addition, the process of modernising and improving Vietnamese laws, regulations, and regulatory supervision relating to the establishment and operation of Vietnam investment funds is on-going.
Great care must always be exercised in the establishment of Vietnam-focused investment funds, whether foreign-domiciled or Vietnam-domiciled, and the investments by such funds once established. History has shown that there are numerous pitfalls awaiting those who fail to obtain specialist and experienced Vietnam law advice.
Advising a specialised asset manager, currently with US$600 million in assets under management, on the structure of a potential acquisition of a number of Vietnamese affiliate companies carrying out sugar manufacturing and related activities.
Acting for a large listed investment fund in regard to its contentious, proposed acquisition of shares in a Vietnamese company specialising in building and leasing Base Transceiver Station towers to mobile service providers.
Advising on the proposed divestment by a global private equity firm from its investment through a controlling stake in a Vietnam-domiciled beverage manufacturing entity.
Acting for a large global venture capital fund in respect of its acquisition of a strategic equity stake in one of Vietnam’s leading internet services companies.
Advising an international investment firm in relation to the proposed establishment of an asset management company in Vietnam.
Acting for one of the major investors of one of the largest foreign fund managers in Vietnam in regard to a proposed divestment of its interest to a strategic investor or international financial institution. The project was high profile because it involved the sale of a significant stake in one of the largest foreign fund managers in Vietnam. Frasers advised the strategic investor with respect to various aspects of the divestment process, including the appointment of a leading investment bank as corporate advisor, and from a strategic perspective with respect to the resolution of a range of control disputes involving shareholders and board members with divergent interests.
Advising the largest investment fund manager in Vietnam on a complex deal involving a closed-end Cayman Islands exempt limited partnership that its major client had previously established and sponsored. Frasers was required to assist its client with documentation including a private placement memorandum that the fund manager wanted to release to prospective professional investors to raise additional capital for its second private equity fund.
Acting for a property fund company on the establishment of a Vietnam-focused property investment fund. This involved the conduct of comprehensive legal due diligence on eight seed projects, at varying stages of development, and the documenting of complex yet effective contractual arrangements with Vietnamese developers.