Vietnam Property Holding 2
|Target Return (%)||15%/annum|
|Target Size||USD 100mn|
|Investment Focus||Real estate projects, listed equity, and structured debt (mezzanine/convertible bond)|
|Fund Structured||Close-ended fund|
|Term of Fund||5 years|
|Fee Structure||1.5% Management fee
15% Performance fee (above a high water mark)
|Min. Subscription||USD 500,000 for individual
USD 5,000,000 for institution
Track Record: VEH versus VN Index
Vietnam Property Holding 2 (VPH2) invests primarily in Vietnam real estate projects, listed equity, and structured debt. The fund is subject to investment, equities, foreign currency risk and the risks of investing in emerging markets specific to Vietnam market. VPH2's investments are concentrated in Vietnam, and the value of the fund may be more volatile. The fund can invest in derivative instruments which may involve additional risks (i.e , leverage may cause greater volatility). Investors may suffer substantial loss of their investment in the fund. Investors should not invest in the fund solely based on the information provided in this document and should read the prospectus (including potential risks involved) for details.
The fund aims to achieve long-term capital growth from investing in a diversified portfolio of promising listed Vietnamese real estate development companies and projects. The fund also seeks attractive opportunities from structured debt markets in real estate sector (mezzanine loan/convertible bond)
Why Invest in Vietnam and Why Now
- Credit tightening in bank lending and lack of an alternative credit supply are opportunity for funding gap in the capital markets. Yields are attractive with good risk-adjusted for many corporate bonds (8-12%) and structured debt products (14-20%).
- Valuations are extremely attractive with may real estate listed companies trading at less than 11X P/E (excluding VIC & VHM)
- High demand in residential market, rental and office market due to low urbanization rate, rise in middle class, consumer optimism, F&B/fashion markets and co-working space.
- Vietnam is the biggest beneficiary of the US-China Trade War as companies shifting manufacturing base to Vietnam driven industrial park and real estate investment opportunity.
- Free Trade Agreements (FTA) involving more than 50 partners will ad 2-3% of Vietnam's GDP growth over the next 5 years. Foreign Direct Investment (FDI), driven by young and low-wage workforce, Vietnam has attracted on average US$20 billion in FDI/annum.
- Vietnam is a front-runner to join MSCI's Emerging Markets Index that will lead to a signification stock market surged.