New investment fund set up

Vo Van Tai, chairman of TVMC - which was founded by Ho Chi Minh City-based TVH Corporation, Phuong Nam Commercial Bank (PNB) and a number of local individuals - said the fund is expected to close by next month with VND20 billion ($1.26 million) in capital.
“We have collected more than VND10 billion so far,” Tai told Vietnam Investment Review last week, adding that contributions by foreign investors and overseas Vietnamese (Viet Kieu) would make up 49 per cent of the fund’s capital.
“We are confident that we will raise the expected capital from foreign and local investors, as many investors have been showing keen interest in our fund,” he added, noting that certificates have a selling price of VND10,200 ($0.64), including a VND200 issuance fee.
Operating as a nonpublic investment project, Saigon Fund A1 is the first such one in Vietnam established with member contributions. A nonpublic investment fund is established by at least one member and at most 49, has less capital than a public fund, offers different investment products and may not list on the stock exchange.
Saigon Fund A1 plans to spend 60 per cent of its capital on shares now listed on the stock market and the rest on not-yet-listed shares and other assets. It will invest mainly in banking and import-export industries.
“Vietnam’s growing economy, dynamic private sector, huge reserves of idle funds held by commercial banks and the public, and buoyant stock market would provide a good foundation for this fund to attract investors,” Tai said.
TVMC is targeting a 30-40 per cent increase in Saigon Fund A1’s net asset value and a dividend of 15-17 per cent in 2006. The Bank for Investment and Development (BIDV) will supervise the fund’s investment activities and KPMG will audit. According to deals inked last week between TVMC and its partners, Grant Thorton will advise on investments and Vision & Associates will provide legal services.
In addition to Saigon Fund A1, Tai said TVMC plans to set up a Saigon Fund B2 and Saigon Fund C3 next year. “We prefer operating several small and medium-scale funds rather than one big one. We are now considering one or two funds to specialise in certain industries, such as banking, insurance or real estate, or to manage investment funds formed by Viet Kieu,” he said.
SSC officials support the establishment of nonpublic investment funds, saying they and other such projects should be formed to diversify the market for domestic and foreign investors. Investment funds, they argue, would create a new investment channel to lure idle money from the public and would help investors with professional investment management services.
TVMC has a chartered capital of $700,000, of which TVH Corporation holds 40 per cent, PNB, 10 per cent, and eight local individuals the balance. It is Vietnam’s fourth investment management firm since the stock market opened in 2000. The other three are VietFund Management, a joint venture between the UK’s Dragon Capital Ltd and Sacombank, Prudential Vietnam Fund Management and Manulife Vietnam Fund Management.