10:18 | 18/09/2018 Investment
(VEN) - Vietnam Economic News’ reporter Minh Long spoke with Andy Ho, Managing Director and Chief Investment Officer of VinaCapital, about its recent cancellation of its US$32.5million investment in the Ba Huan Company Limited.
Why didn’t VinaCapital proceed with its investment in Ba Huan?
I think someone told me once that there is no such thing as bad PR....clearly we got a lot of PR attention from this and I hope potential investors will come to appreciate that VinaCapital takes investments very seriously and professionally.
Since we manage other people’s money, we do our best to protect their money and achieve the highest risk adjusted return. In this case, we wanted to resolve the problem and PR noise quickly because it was distracting. It distracts us from doing other great investments and it distracted the CEO and our current and past investments. Therefore, we think that these CEO’s time and our time can be better spent building great businesses and hiring more people than to be distracted by this case.
Do you think the current cancellation can have a negative impact on other Vietnamese companies that are trying to raise foreign capital but still lack experience? Will this affect future foreign direct investment (FDI) in Vietnam?
I don’t think this will have a negative impact on other Vietnamese businesses or will impact FDI. Vietnam has a lot of great businesses to invest in and the economy is stable and growing. Therefore, a lot of foreign investors still want to invest in Vietnam.
I have done almost 200 transactions in Vietnam since 2004 and I have not come upon such challenges as faced with Ba Huan before. Having said that, every single transaction is different and has its own challenges. These challenges explain why I enjoy investing in Vietnam and emerging markets, but it also means that we have to target a higher return than normal.
From the perspective of an international investment fund with years of experience in the Vietnamese market, do you have any advice for other private Vietnamese companies that want to attract foreign investments to improve their competitiveness?
We face many challenges investing in Vietnam and emerging markets. These are the challenges that we come to understand and enjoy. Our strategy remains the same and that is to invest US$20 million to US$50 million into growing private businesses with the hope of taking them to an Initial Public Offering (IPO) in the near future. We have never had and will never have a strategy to take over a business. Our strategy is to find good businesses with capable and trusting managers and provide them capital to hire more people and grow into a great business.
Therefore we advise that private businesses get to know investors like us over a longer period of time, like a year or more. And really understand what motivates us and what worries us and most importantly what kind of value we can bring to the business. Over the course of getting to know each other you will better understand each other’s expectations. You will hire advisors, lawyers, consultants, etc. but there is nothing better than spending quality time with the potential investors.