Vietnam Economic Times
How does the name change from Anpha Capital to SAM affect the fund’s ongoing business?
Anpha Capital Group (ACG) changed its name to Saigon Asset Management Corporation (SAM) in early August to differentiate ourselves from various companies in Vietnam with the same name. The corporate name change affects the investment manager level only. We still manage two flagship funds: Vietnam Equity Holding (VEH) and Vietnam Property Holding (VPH) which are listed on the Frankfurt Stock Exchange in Germany.
So what are your top priorities?
Our top priority will always be focusing on achieving a respectable return-on-investment (ROI) to our investors. The VEH strategy is to continue to focus on listed equities that command attractive valuations, a strong management team, market share, performance and liquidity. The VPH strategy is to secure prime metropolitan locations either by leasing or purchasing sites directly from the government together with a strategic partner. We also acquire units at the earliest stages of project development in order to maximise capital appreciation.
What have been the fund’s achievements to date?
The real achievement is reflected in our net-asset-value (NAV) gain in the first half of 2008. Both VEH and VPH are the top performers in Vietnam according to LCF Rothschild, the UK financial firm that tracks all Vietnam and emerging country funds.
Specifically, the VEH portfolio did not invest during the peak period and came in when the country’s stock market was near bottom, at the 370 points level. We stayed away from private equity and invested in listed industry leaders. VPH achieved impressive gains by investing in proprietary properties which we were able to source through local partners and foreign strategic partners.
Some investors reclaimed their investments due to the stock exchange’s recent fallout, which forced some funds to sell in order to retrieve capital for investors. Was this the case at SAM?
SAM finished fund raising in late 2007, so we were therefore able to escape the peak period of the country’s stock market. We have been accumulating listed shares during the downturn and have been exiting based on the value range approved by our investment committee. However, other funds and investors may exit but the gain can only be determined on how long ago they actually invested.
Why were the Hanoi Fund Management and Thang Long Securities Company selected as local partners of SAM? What added value do you anticipate?
We looked at various possibilities and at the end it’s all about chemistry. The management team at Hanoi Fund Management (HFM) have strong ethics and impressive characteristics. HFM is co-owned by the joint-stock commercial Military Bank, and is currently managing two funds worth $122 million. The Thang Long Securities Company is a top brokerage house in Vietnam and also a major shareholder of HFM. These are currently the two strategic partners of SAM.
HFM is providing us with portfolio management services, in which they act as the sub-investment manager for VEH locally, while the Thang Long Securities Company is providing us with a full range of investment banking services. With these strategic alliances, SAM will be able to realise more proprietary investment opportunities and have greater access to local expertise.
In all, we have a foreign fund/local partner business model where we the investment manager shares the economics with our local partners to provide incentives and increase transparency and efficiency for proprietary deal sourcing, which results in greater ROI for our investors. This model is not being applied in Vietnam in the fund management business. For now, this model enables us to have full investment banking capabilities with one of the best local connections possible.
Do you believe Vietnam’s economy is going through a “boom and bust cycle” or are we only seeing an economic adjustment?
Vietnam is not the only country affected by the global downturn. It still has much stronger growth momentum than most countries around the world and its economy will stabilise. The only variable is the policymakers’ actions ahead, and only time will tell.
With the name change, what message are you sending to your global investors?
You should benchmark Vietnam against any emerging country in the world and spend a few days on the ground to look at the economy and potential deals for due diligence. I would be very surprised if you don’t get excited about the potential. We can also have you talk to our international institutional investors, who will have a more independent, pragmatic view.
Can you tell us more about the Frankfurt listing?
Most of our investors are European and prefer a vehicle to invest in Vietnam at a major European market. While most Vietnam funds are listed on London’s Alternative Investment Market (AIM), we chose to be on the Frankfurt Stock Exchange to differentiate ourselves, and this was also the preference of our investors.
Can you comment on what it means to be a “Viet Kieu” (overseas Vietnamese) and helping in the rebuilding of your former country?
I don’t consider myself to be “rebuilding the country”, as the country has been going strong and doing just fine without significant Viet Kieu assistance since 1975. I chose to leave the US after 30 years to work and live in Vietnam because I truly believe in the great economic potential of the country and the quality of life. I don’t think this would be disputed by the large number of foreigners doing the same in the country.
What holds your attention at SAM at the moment?
Again, our focus on delivering a respectable ROI to our investors. Internally, we are recruiting more capable staff while continuing to enhance the professional development of our current team. It needs to be emphasised that our key differentiations are ethics and a heavy focus on the professional conduct of our employees, to ensure the long term foundation and performance of SAM.
What are the opportunities and challenges for the development of the asset management market in Vietnam and what should authorities do to support such development?
The opportunities are tremendous, with much to gain. However, there are no fully-fledged, world class investment banking services in Vietnam, simply because they feel the market is too young to launch such operations. Some investment banks offer limited services, but most remain suitcase bankers. We foresee this changing in the next five years, as Vietnam appears to be making significant strides forward and is on the watch list of the big investment banks. There are obvious signs of support from the government towards the financial sector in Vietnam and we believe it’s only a matter of time before the country enters the big league.