Vietnam Growth Fund Limited, VGF

Bid 19.25Offer 19.75Updated 30/12/2015NAV 23.26As at 30/12/2015
(as at 24 December 2015)
Weekly YTD 1YR 2YR 5YR
Share Price 0.00 3.49 11.88 8.73 46.77
NAV -1.81 2.38 6.67 6.65 52.92

5 January 2016


Dragon Capital announces merger between Vietnam Growth Fund Limited and Vietnam Enterprise Investments Limited - Vietnam's longest-running fund enlarged to $800m

Dragon Capital today announces that it has merged two funds managed by it - Vietnam Growth Fund Limited ("VGF") and Vietnam Enterprise Investments Limited ("VEIL") - to create an enlarged fund with NAV of $791.64 million. The objective of the merger is to offer:

- enhanced economies of scale, by optimising administrative and overhead costs
- better access to investment opportunities, the size of which are growing alongside the market
- improved liquidity in secondary trading
- bigger scale to institutional investors seeking to tap the Vietnamese growth opportunity

The merger was approved at the fund AGMs on 14 December 2015, by 99.4% of VGF investors and 99.5% of VEIL investors.  It became effective on 31 December 2015. Under its terms, all of the outstanding shares in VGF have been exchanged for shares in VEIL, and VGF has ceased to exist.

Launched in 1995, VEIL is Dragon Capital's flagship fund.  It is now the largest fund for listed Vietnamese equity, and also Vietnam's longest-running fund.  The primary objective is long-term capital appreciation.  This is achieved through holdings in listed and pre-IPO companies that have attractive growth and value metrics, good corporate governance and alignment with Vietnam's underlying growth drivers. The fund may also invest in equity-linked instruments and private equity.  VEIL is closed-ended, incorporated in the Cayman Islands, and listed on the Irish Stock Exchange.

VEIL's broad universe and three-year time horizon allow it to carry strong conviction holdings and off-index investments.  As shown, it has a strong record of performance against its benchmark, the VNI, which it strives to beat on a rolling three-year basis; and against the MSCI-Vietnam and the major Vietnam ETFs:

31 Dec 2015 - TR$% 1YR 2YR 3YR 5YR
VEIL 5.59 16.94 50.84 45.93
VN Index 4.71 16.11 45.71 26.64
MSCI-Vietnam -5.38 -0.10 7.07 -21.28
Vietnam X-Tracker -14.38 -6.83 5.77 -39.85
Vietnam Vectors -18.56 -15.38 -3.96 -33.65

Source: Bloomberg

Vu Huu Dien, Portfolio Manager of VEIL, comments:

"The increased size of the combined funds should prove attractive to large institutional investors looking to access the Vietnamese growth story.  Vietnam is starting to benefit from the significant banking and financial reforms undertaken in recent year.  The increased scale of the fund positions us well for future growth."

Dominic Scriven, Executive Chairman and Co-Founder of Dragon Capital, comments:

"The merger of these two funds makes good strategic sense for Dragon Capital and enables us to build on the success that VEIL has already achieved.  As Vietnam's oldest fund, VEIL has established a long-term track record delivering consistent returns to our investors.  Our scaled-up size should prove an attractive alternative to Vietnam-focused ETFs that have delivered, thus far, dramatic under-performance against the market."

Bill Stoops, Chief Investment Officer of Dragon Capital, comments:

"The economy is generating sustainable annual growth of 6.5%, which is now the second-highest in the world, and capital markets are expanding in line with the economy.  The Government will accelerate this process with its ongoing financial-sector reforms - privatization, higher foreign ownership limits, derivatives trading, provident fund management.  Deal size and diversity are already increasing and the scaled-up fund is an ideal vehicle for taking advantage of this."

About Dragon Capital

Founded in 1994, the Dragon Capital group is an asset management company with two decades of investing experience in Vietnam. Dragon Capital and its affiliates manage approximately US$1.1bn in assets across public equities, private capital, clean development, fixed income and property.  The firm employs close to 90 staff at its offices in Asia and Europe. (For more information, visit Dragon Capital's website at

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