MEF II sells final investment in Vietnam

Mekong Capital has eight equity investments left in Vietnam

Mekong Capital has just announced that the Mekong Enterprise Fund II (MEF II) has successfully divested from Asia Chemical Corporation (ACC) to gain $8.9 million, generating a gross return multiple of 2.6 times and a gross IRR of 15.1 per cent for the investment in ACC.

MEF II initially invested $3.8 million in ACC in 2011, which was its 10^th and final investment. Established in 2001 as a privately-held company in the food industry, ACC has become a leading distributor of high-quality specialty ingredients, chemicals, non-oil related commodities, and other materials, sourcing from worldwide suppliers and selling to leading enterprises in Vietnam.

ACC achieved a cumulative annual net profit growth rate of 18 per cent over the holding period of the investment.

Generally, MEF II achieved a net return multiple of 4.5 times and net IRR of 22.5 per cent for its investors. This marked it as one of the most successful funds in the Asian private equity scene.

Launched in 2006, MEF II is the second private equity fund managed by Mekong Capital. MEF II’s notable investments included Mobile World (Vietnam’s largest nationwide retailer of mobile devices and consumer electronics), Golden Gate (the leading restaurant chain operator in Vietnam), Vietnam Australia International School (a leading private bilingual K-12 school in Vietnam), Mai Son (a leading fashion retailer), and ICP (personal care products).

Earlier, MEF II completed the sale of its last remaining five million shares in Mobile World Group in January 2018, resulting in 56.9 times of gross return multiple and 61.1 per cent gross IRR, making this investment one of the most successful investments in the history of Asian private equity. Prior to that, the fund generated a gross return of 4.5 times and 9.0 times for its investments in Vietnam Australia International School and Golden Gate, respectively.

Mekong Capital is a Vietnam-focused private equity firm specialising in consumer-driven businesses and looking to invest in fast-growing companies, with ambitious expansion plans, and a commitment to building management teams that will successfully execute those expansion plans.

Mekong Capital’s funds have completed 33 private equity investments in Vietnam, of which 25 have been fully exited. Its latest investment vehicle, Mekong Enterprise Fund III (MEF III), has to date announced investments in seven companies, including lending firm F88, logistics companies Nhat Tin and ABA, restaurant operator Red Wok, Ben Thanh Jewelry, Yola Education, and mattress retailer Vua Nem.