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Investment funds complain it’s difficult to find places to pour money
Vietnam proves to be a large market for investors to seek their opportunities. However, investment funds now complain that it’s difficult to find reasonable projects to inject money in.
The decisions to withdraw capital by investment funds made in the first months of 2011 once raised the worry that a new wave of withdrawing capital would occur in 2012 and 2013, the time when the funds become matured. However, analysts say that with the principle followed by all investors – never missing any opportunities to earn money – investment funds, in fact, are restructuring their investment portfolios.
Mekong Capital, for example, has decided to focus on the business fields that push up consumption, while it has been concentrating on branding, marketing, managing sale and building the distribution networks.
Dominic Scriven, General Director of Dragon Capital, said that Dragon Capital’s priority remains listed companies, but it would only focus on good listed companies which gather their strength on their main business fields and have high turnover and profit growth potentials. Especially, the companies need to have the reasonable ratios of debts on capital and have professional governing staff.
He went on to say that Dragon Capital would prioritize to funnel capital into consumer and food industries, technologies, software services and finance services.
Meanwhile, VinaCapital said it would focus on the fields of healthcare, food, agriculture and education.
As such, analysts say, Vietnamese businesses will not lack capital, but the thing it needs to think about is what they should do to “absorb” the capital.
According to Alan Phan, President of Viasa Investment Fund, about 400,000-500,000 billion dollars run around in the world every day. With such a huge capital volume, there is no ground to think that a company with good governance skill and makes high profits cannot obtain 10-20 million dollars worth of capital.
He went on to say that a friend of his, who, together with his 8 colleagues, flew from the US to Vietnam to seek the places for the disbursement of the huge capital of 100 million dollars. However, the year 2011 is nearly ending, but they still have not found the places to pour money.
The same situation has also been faced by the investment funds which have been existing in Vietnam for a long time. Mekong Capital is a typical example. Having been presented in Vietnam for more than 10 years, Mekong Capital is now managing three investment funds with the total initial capital of 133 million dollars. The fund targets unlisted shares of rapid growing companies which operate in the field of consumer goods.
Thomas Lanyi, Investment Director of Mekong Capital Consultancy firm, said that Mekong Capital wants to pour money into the companies which concentrate on their main business fields, the companies, where the board of directors actively builds up good management teams, strong corporate culture, where their members share common values.
However, he said, the biggest challenge for Mekong Capital is that it is very difficult to find the businesses which have competent management teams. Most of the companies in Vietnam have the loopholes in the management teams and problems in corporate culture. Besides, very few private businesses have the net profits of over 10 million dollar per annum.
Alan Phan said that businesses need to be patient when persuading investors to inject money in their businesses. “The key is the patience. Businesses may knock at the doors of investors 100 times, but the doors may open 10 times only to them, and only one of the investors invite them for talks,” he said.
In general, there are two things that investors are interested in businesses 1) what competitive edges businesses have and 2) what achievements the board of directors could make in the past.
vietnamnet
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