Business

International investors of four funds under the management of the VinaCapital Group recognise Vietnam 's long-term potential but are concerned about the country's struggle to contain inflation.

VinaCapital is the leading investment management and real estate development firm focused on Vietnam - illustration photo

VinaCapital chairman Terry Mahony said: "In the short term, Vietnam still faces challenges including high inflation and interest rates, which cause pressure to investment funds."

Andy Ho, head of investment, said that investors were worried about the dong weakening and would make decisions only if they discovered opportunities unaffected by the forex-rate risk.

However, he said inflation was trending down and should be around 12-14 per cent for 2012.

"The most important thing is that the Government should stick to the current policy to ensure stability, as well as invest more aggressively and more efficiently in infrastructure and education and training," he said.

He added that this development would help improve productivity, thus attracting investors.

VinaCapital CEO Don Lam said he would focus on investor relations with updates and road shows to Europe, North America and Asia , which would begin later this month.

"We will continue to highlight Vietnam 's long-term strengths by actively participating at international investment conferences and events," said Don.

Around 40 investors attended the VinaCapital event on Oct. 13 in HCM City to hear a detailed review of the performance of its funds over the past 12 months.

"We want our investors to have a clear picture of the investment environment facing our funds, and our accomplishments during this challenging time," said the CEO.

Vietnam 's GDP growth has slowed to under 6 per cent due to tight fiscal and monetary policies put in place to fight high inflation.

As a result, the equities and real estate markets have performed poorly.

Foreign investment has continued, however, with several significant investments by multinational companies attracted to the long-term potential.

VinaCapital has been involved in deals selling stakes in several companies, Hanoi Liquor Joint Stock Company to Diageo, a major international drinks firm, and Hoan My Healthcare Group to India 's Fortis Health.

"These companies, among others, are looking at Vietnam from a long-term perspective, and the maret remains interesting," said Andy Ho.

As of September, VinaCapital's three AIM-traded investmen funds – which are focused on listed and private equities, real state and infrastructure – have a total of $1.7 billion in assets under management.

It also manages, in cooperation with the US firm Draper Fisher Jurvetson, a technology investment fund, the DFJ VinaCapital LP.

Over the past year, there were several major investments, including the VinaCapital Vietnam Opportunity Fund (VOF) acquisition of stakes in Yen Viet JSC and Thai Hoa Coffee; Vietnam Infrastructure acquiring a major stake in Ba Thien 2 Industrial Park in northern Vinh Phuc Province.

VinaCapital is the leading investment management and real estate development firm focused on Vietnam, with a diversified portfolio of $1.7 billion in assets under management.