A Vietnam-focused private equity investment fund management company plans to revive efforts to launch an entirely new fund to invest in the country’s rapidly growing consumer sector.
Chris Freund, Mekong Capital’s managing partner, said after completing several more exits of its current investments, his company expected to launch a new fund targeting $150 million in new capital, sourced from foreign investors, that would target consumer goods, retail and consumer services companies. Most likely this fund would be launched in the second half of 2012.
“The capital of the new fund will be invested in 10-12 private companies via private equity deals,” said Freund. Freund believed Mekong Capital would be able to successfully mobilise new funds where others failed because his company had a proven track record in the sector.
“Mekong Capital typically invests in companies which are the fastest growing and which are the market leaders in consumer-driven sectors such as retail, consumer products and distribution. The year 2012 will be a good time for cash rich investors to invest as low valuations present good investment opportunities,” he said.
Mekong Enterprise Fund (MEF), the first fund of Mekong Capital launched in 2002, is making progress towards divesting itself of the remaining investee companies as the fund’s timeline draws to a close at the end of 2012.
MEF II’s investee companies performed well in terms of net profit, achieving weighted average net profit growth of 51 per cent in 2011, according to Mekong Capital statistics.
Vietnam’s high economic growth rate, plus its growing population and income levels underscored its consumer goods potential, said Manulife Vietnam Fund Management director Sebastian Subba.
“With its booming population, rising educational levels and the expected continued upward trend of income growth, Vietnam’s consumer market should continue to flourish,” said B. Alexander Frank, an investment consultant in Hanoi.