Mekong Capital wins private equity international award

Mekong Capital has been awarded the 2017 Private Equity International Award for Operational Excellence for a small cap investment in Asia, based on the performance of Mobile World.

This is the fifth year in a row of Mekong Capital winning an award by Private Equity International, after having won the Operational Improvement Firm of the year for the Asian Small Cap category in 2013 and 2015, Frontier Market Firm of the year for 2014 and 2016.

Mekong Capital is well-known for its ‘Vision Driven Investing’ formula – the secret sauce for its series of consistently successful investments. Mobile World has applied most of the framework and is one of the best performers of Mekong Capital’s investee companies.

The ‘Vision Driven Investing’ framework seeks to align stakeholders with investee companies to achieve big breakthrough goals. Vision Driven Investing was first introduced in 2009 and includes 14 components which are the key success drivers of Mekong Capital’s ability to add value to investee companies.

Mekong Capital has supported Mobile World to implement the framework via different initiative from creating a vision, improving management team, building corporate culture and involving outside experts.

For example, Mekong Capital inspired Mobile World to create and launch its first vision in 2008 and then revised visions in 2011 and 2015. With a clear vision, Mobile World’s team aligned around common goals, and successfully achieved their shared vision.

Since 2008, Mekong Capital recruited for Mobile World key senior managers and executives who tremendously contributed to the success of the company. Many of them are still with the company and playing critical leadership roles.

Furthermore, Mekong encouraged and assisted Mobile World to build a strong corporate culture by inviting the retailer’s 35 top people to participate in a nine-month breakthrough leadership programme as well as some follow-on programmes.
Once the new culture took root in the top several hundred people, they cascaded it down to others in the company.

Besides, Mekong Capital has also fostered connections between Mobile World and sector experts and international industry leaders, transformed the company’s incentive system and supported its management in expanding into new business areas such as consumer electronics and grocery sectors.

As a result, Mobile World has grown into the market leader in Vietnam’s mobile device sector and consumer electronics sector while made a successful start in grocery sector.

By September 2017, Mobile World operated with 1,057+ mobile phone stores across the nation, controlling more than 42 per cent of the national market share. The company is also operating 535+ electronics stores, controlling more than 22 per cent of the national market share and a small format grocery chain with 190+ stores.

Since 2013, Mekong Capital has made 18 partial divestments of Mobile World including the most recent one in September 2017 in which it sold shares worth more than $18 million and realised gross IRR of 62.6%+ and gross return multiple of more than 133 times on the shares sold.

The Vision Driven Investing framework has proven itself as a secret sauce of Mekong’s successful investments over time after effectively adding value to other investee firms that applied the initiative.

Mekong Capital is a Vietnam-focused private equity firm, specialising in consumer driven businesses. Mekong Capital’s funds have completed 32 private equity investments in Vietnam, of which 22 have been fully exited and one have been partially exited. Mekong Capital manages four funds, with a team of 25+ full-time people in our offices in Ho Chi Minh City and Hanoi.

The funds invest in fast-growing companies, with ambitious expansion plans, and a commitment to building management teams that will successfully execute on those expansion plans. These companies are typically well-established companies in consumer-driven sectors which operate in fragmented and fast growing markets which provide attractive growth opportunities.

Mekong Enterprise Fund III has currently made seven investments in pawn firm F88, logistics companies Nhat Tin and ABA, restaurant chain Chao Do, Ben Thanh Jewelry, Yola test prep centres. All investee firms in MEF III are implementing Vision Driven Investing framework.

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By Thuy Vinh