VinaCapital Vietnam Opportunity Fund Ltd. has acquired a minority stake in in Yen Viet Joint Stock Company, a Vietnamese consumer goods firm that sells edible bird’s nest nutritional products. Terms of the deal were not released. VinaCapital is an investment management and real estate development firm in Vietnam. Formed in 2003, it has $1.7 billion in assets under management.
VinaCapital Vietnam Opportunity Fund Limited (‘VOF’, or ‘the Company’), an AIM-quoted investment vehicle focused on Vietnam, today announces the acquisition of a minority equity stake in Yen Viet Joint Stock Company (‘Yen Viet’), a Vietnamese consumer goods firm that sells bird’s nest nutritional products.
The edible nests of swiftlets are considered a delicacy in many parts of East and Southeast Asia. The largest market is China, particularly Hong Kong, where bird’s nest is used as part of traditional medical remedies. The nests are farmed or collected from natural caves, without harming the birds.
The global market for edible bird’s nest was USD3.4 billion in 2010, with supply sufficient to meet only half of demand. The production of both natural and farmed bird’s nest has high entry barriers, given the technical skills required. Supply of natural product cannot be increased significantly, while the farmed segment offers the potential for exponential growth.
Yen Viet, which focuses on affluent clients with high disposable income, is a pioneer in the market and has increased the value of its brand by creating a popular bottled bird’s nest drink.
VinaCapital will assist the company in strengthening its distribution channels, production capability and product development. In addition, steps will be made to improve corporate governance and to examine the possibility of a listing on a Vietnamese or international stock exchange.
Commenting on the acquisition, Andy Ho, Managing Director of VOF’s Investment Manager, said: “VOF’s investment in Yen Viet and its recent strategic exits from companies like Halico and VinaCafe are a testament to the fact that VinaCapital continues to be a dominant player in the private equity space in Vietnam. The consumer goods sector is particularly attractive given its growth prospects, and Yen Viet is a perfect example of Vietnam’s potential in high-margin, high-growth consumer products. ”
VOF holds significant investments in Vietnam’s consumer goods sector, including stakes in Vinamilk, Kinh Do Confectionary, and Phu Nhuan Jewelry. In January 2011, the fund sold its stake in Halico, a vodka producer, to Diageo, and in November 2010 it sold its stake in Vinacafe, an instant coffee producer, for returns on capital of 5.3x and 3.3x, respectively.
Notes to Editors:
VinaCapital is the leading investment management and real estate development firm in Vietnam, with a diversified portfolio of USD1.7 billion in assets under management. VinaCapital was founded in 2003 and boasts a team of managing directors who bring extensive international finance and investment experience to the firm. Our mission is to produce superior returns for investors by using our experience and knowledge to identify the key trends and opportunities that emerge as Vietnam continues to develop its economy. To achieve this, VinaCapital has industry-leading asset class teams covering capital markets, private equity, fixed income, venture capital, real estate and infrastructure.
VinaCapital manages three closed-end funds trading on the AIM Market of the London Stock Exchange. These funds are: VinaCapital Vietnam Opportunity Fund Limited (VOF), VinaLand Limited (VNL), and Vietnam Infrastructure Limited (VNI). VinaCapital also co-manages the USD32 million DFJ VinaCapital L.P. technology venture capital fund with Draper Fisher Jurvetson.
VinaCapital has offices in Ho Chi Minh City, Hanoi, Danang, Nha Trang, Phnom Penh (Cambodia) and Singapore.