VinaCapital is the leading investment management and asset management group in Vietnam.
Need for initial capital for private sector
Experience from Asian economies shows that to form a strong private sector, capital from the ecosystem of investment funds is needed. Looking back at the model of capital supply for private enterprises in Asian countries and in the region, the role of domestic investment funds has always been a "springboard" for businesses to develop.
For example, behind Korean Chaebols like Samsung, SK or LG is an abundant flow of capital from domestic investment funds. It is this resource that has promoted research capacity, developed breakthrough products and expanded scale at an extraordinary speed.
Singapore has two famous national funds, Temasek Holdings and GIC. Not only investing in the system of companies here, the two funds also invest in many companies in the region, including Vietnam. Despite its small size, Singapore has a surprisingly prosperous economy with the diversity and strong development of the financial, technology and service sectors. The policy of this island nation is to develop an investment fund ecosystem based on the core of a number of large funds, along with favorable mechanisms to attract international and regional funds to set up operations.
Another case is Israel, which started with the development of venture capital, turning a country with limited resources into a "startup nation". To promote innovation, the government introduced a venture capital program in 1993, which acted as an important "catalyst" to strongly attract foreign and domestic venture capital. This model has created an extremely dynamic innovation ecosystem, spawning many successful technology companies and a series of large-scale global M&A deals.
Taiwan also has a national development fund, investing and providing early support for future giants like TSMC - the world's largest chip manufacturer, or MediaTek (chip design).
In general, domestic funds, both public and private, play an essential role as "seed capital" to start the development journey of enterprises. However, the role of funds is not only to provide finance but also to act as a bridge to improve management methods, development experience, market expansion, technological capacity and international connections. Enterprises "incubated" by these funds have become core growth drivers, contributing to creating "economic miracles" and expanding their influence in the global market.
VinaCapital's VOF Fund invested 47 million USD in Hoa Phat Group in 2007, contributing to a 13.6-fold increase in capitalization and a 25.6-fold increase in revenue by the end of 2024, compared to 17 years ago.
Domestic resources: a turning point for change
Vietnam also experienced an impressive period of development, promoting domestic enterprises to grow in a unique economic context. In the 2000-2010 decade, the economic picture changed dramatically with the event of joining the WTO, the birth of the stock exchange and abundant net investment capital.
Many private enterprises have risen during this period, typically Hoa Phat. In 2007, VinaCapital's VOF fund invested 47 million USD (equivalent to 5% of the capitalization value at that time) in the form of private equity, creating a financial foundation for Hoa Phat to build an integrated steel production complex with a capacity of 2.5 million tons of construction steel per year. By the end of 2024, Hoa Phat's steel capacity had reached 8.5 million tons/year. Along with that, the company's value also increased sharply, with capitalization value increasing 13.6 times, revenue increasing 25.6 times by the end of 2024, compared to 17 years ago.
Similarly, with capital from investment funds such as VinaCapital, Kido has also strongly transformed from a traditional confectionery company into a multi-industry food corporation, focusing on essential products. In the healthcare sector, Tam Tri Hospital has increased the number of hospitals from 4 to 8 in the 2018-2022 period, while increasing its capacity from 400 beds to 1,200 beds.
The achievements of the above enterprises not only demonstrate their growth potential, but also affirm the role of domestic investment funds such as VinaCapital, helping Vietnamese enterprises overcome challenges in capital, management and market expansion to reach new heights.
According to Ms. Nguyen Thi Dieu Phuong - Deputy CEO of VinaCapital Group, said: "Investment funds not only provide capital but also accompany businesses in establishing transparent governance systems, strict financial control, and process optimization. In addition, investment funds have the ability to promote business consolidation and expansion, especially in important areas such as technology, healthcare, finance, and manufacturing. Through mergers and acquisitions, investors help businesses grow stronger, have a better position to participate in global supply chains, attract more investment capital and achieve a leading position in the industry".
"We also expect that Vietnam will have large private corporations with strong capital, technology, systems and proactive participation in the global production and supply chain, which will be a testament to the strength of Vietnam's private economic sector," said Ms. Phuong.
Ms. Phuong of VinaCapital affirmed that Resolution 68 encourages the unit to continue to seek and accompany potential businesses, contributing to promoting the strong development of Vietnam's private economy.
Le Nguyen
Source: https://baochinhphu.vn/huy-dong-nguon-luc-noi-dia-cho-kinh-te-tu-nhan-phat-trien-102250613230510578.htm
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