Dragon Capital and Frontier Investment & Development Partners announce have formed a joint venture for regional private equity – Indochina Opportunity Partners (IOP) – which has now commenced marketing its Indochina Opportunities Fund.
The Fund is the first-ever private equity vehicle specifically focused on the Indochina region. It will be opportunistic in its approach and invest across Vietnam, Cambodia and Laos, countries where it has already constructed a substantial investment pipeline across a variety of sectors. The Fund’s strategy will seek to capitalise on the increasing number of consumer and industrial opportunities in Vietnam, while harnessing the agricultural and natural-resource potential of Cambodia and Laos. No more than two-thirds of AUM will be dedicated at any one time to either Vietnam or Cambodia/Laos.
The Fund affords diversified investment risk across three countries, in a region that is currently demonstrating significant value when compared with the more established markets of Asia. Vietnam, Cambodia and Laos are all actively seeking access to foreign capital, management expertise and technology. The Fund will seek to capitalise on their growth potential by bringing those factors to play.
The Fund is targeting professional investors based in Europe, the Middle East and Asia, and is aiming for a first close of USD50-100m. It will have a minimum commitment size of US$5m and a management charge of 2.0% per annum.
Dominic Scriven, Chief Executive Officer and Founder of Dragon Capital, says: “We are very excited by our partnership with FIDP, which is one of Cambodia’s most promising private-equity groups. The Fund we are building offers investors the chance to generate strong, risk-adjusted returns through exposure to frontier-market growth.
“Dragon Capital has a long history of delivering value in the region through our investment and risk-management expertise. Indochina offers a compelling mix of consumer-industrial and resource plays, given its geographic diversification and low entry points.
“Vietnam in particular is undergoing a very active new phase of reform to stabilise the economy and prevent the overheating woes of the past. This points to a significant turnaround in its economic fortunes that are expected to re-engage the country’s still-powerful growth drivers: ideal demographics, a large low cost but increasingly skilled labour force, a strong work ethic, political stability and ongoing FDI.”
Marvin Yeo, Founder of Frontier Investment & Development Partners, says: “Cambodia has serious potential in the agriculture space, where the country used to be a world-class player for crops like rubber and rice, and where the Government is keen to reactivate exports. There are also opportunities in minerals and infrastructure, as well as manufacturing. The county is investor-friendly and politically stable, with no capital controls and a dollarized economy. Laos is expected to take on many of the same positive characteristics of Cambodia as it opens up. And Myanmar is set to become one of Asia’s top investment destinations when sanctions are fully lifted.”
