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Southeast Asia

Private equity blossoms in Vietnam

With its strong growth and rising levels of income and urbanization, the country is attracting plenty of PE. The challenge, both in the private sector and in those SOEs the government is selling, is to find deals that fly.

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In the world of Vietnamese private equity, everyone is on the prowl for the next Mobile World. When Ho Chi Minh City-based Mekong Capital shelled out $3.5 million for a 35% stake in the firm in 2007, it was just one of thousands of shops selling early-era cellular phones and assorted electrical goods.

Vietnam’s economy was starting to buzz, but private equity struggled to find good, young, well-run and undervalued companies in which to invest. Mekong clearly liked Mobile World’s management, led by co-founders Tran Le Quan and current group chief executive Nguyen Duc Tai, and the cheerful yellow-on-black colour scheme in its stores.

Led by co-founder and partner Chris Freund, Mekong had presumably also noticed the sharp rise in the use of mobile phones. In 2005, just 11 out of 100 citizens had a mobile; within two years, that number had jumped to 52, according to data from Hamburg-based research firm Statista.

Fragmented frustration

In the past, private equity investors entered Vietnam with their eyes open. They knew the state controlled a host of sectors, from cigarette imports to the sale of fireworks.




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