Fund management companies ripe for the picking

Last month, Hoa Binh Securities (HBS) unveiled the plan of acquiring 51 per cent stake of An Phu Fund Management Company. According to the brokerage for, it priced An Phu at just VND15,000 per share at maximum. The fund management company was established in 2006 and has VND25 billion ($1.2 million) in charter capital now.

Some weeks before, state-owned bank Maritime Bank also announced it was purchasing Tin Phat Management Company. At the moment, almost all procedures are being finished and the name Tin Phat would be soon re-named, said Maritime Bank. The three-year-old fund management company had been purchased at much lower than the amount VND26 billion ($1.25 million) in its charter capital.

Hoang Minh Son, who runs sanotc.com – a well-known web serving over-the-counter securities trades, indicated that demand in purchasing fund management company had raised. Those buyers almost asked the small-scale company with less than VND40 billion ($1.9 million) in charter capital and also a robust financial performance. They also imposed condition to buy at the discount the stock investment items of the fund management companies, as the stock market had strongly declined.

HBS deputy director Nguyen Huy Duong indicated that fund management companies practically diversified in several financial businesses. Additionally, the new law on securities, coming into effect in July, was to allow those companies establishing securities companies and offering those securities companies to the public also. “Acquiring fund management company at this moment is a long-term targets,” said Duong.

“They were seemingly preparing for the recovery of the stock market in the future,” said Nguyen The Minh, general director for Maritime Bank Securities. According to Minh, some domestic major financial institutions were seeking fund management companies with the aim of diversifying their business.

Meanwhile, as the State Securities Commission (SSC) had stopped licencing new fund management companies and securities companies after a flooding establishments of those companies in local stock market, acquiring the existing companies with low prices was believed to be a unique way for financial institutions to expand to fund management sector.

In general, the successful acquiring fund management company deals were the ones with the buyer being a bank and the seller a private-owned companies, said Vietnam Financial Investment general director Phan Xuan Can.

There are now 47 fund management companies operating with total VND2.1 trillion ($101.5 million) in chartered capital and more than VND100 trillion ($4.83 billion) in assets, showed State Securities Commission data. Their last year revenue reached some VND600 billion ($28.98 million) and profit was of more than VND200 billion ($9.66 million).