For family offices or multi family offices the decision on how best to access frontier markets might seem quite overwhelming. As family offices continue to grow in importance as a source of investment capital, Dominic Scriven, CEO of Dragon Capital, highlights the opportunities for these investors.
Emerging and Frontier markets can offer some very attractive returns but need to be approached with care. Family Offices seeking to access these attractive long term returns need to ensure that the funds in which they invest have the appropriate expertise and experience of the markets in which they invest to minimise the risk factors that they face.
“Our focus on the Frontier Markets of Vietnam and Indochina over the last 18 years, has taught us many valuable lessons about investing in the region and today lets us offer our FO clients participation in the capital markets through a variety of channels from our flagship country funds to direct investments and co-investment in PE ventures.”
Co-investment opportunities are seen as an especially exciting prospect for FOs with backgrounds in sectors such as Real Estate, Consumer Staples or Financial Investments and Dragon Capital has co-invested US$40m with its clients in its own funds. Dominic Scriven added: “As a rapidly developing financial market, with hundreds of listed companies, dozens of new listings and active capital- raising, Vietnam provides numerous opportunities for any FO.
“In the past, Dragon Capital has introduced and assisted investors in making investments in large private banks in Vietnam and promising industrial projects.”
Dragon Capital will construct a portfolio according to the FO’s objective, drawing upon all asset classes. Model portfolios are tailored and all of Dragon’s investment teams contribute their expertise. Investment criteria are established and agreed in advance of funding and each portfolio is constructed to scale according to investment objectives and universe of companies available.
Portfolios could take the following structure:
Market valuations are currently attractive with a 2013 PER of 8.4x on EPS growth of 13.4%, but this is also the case with Dragon’s various investee companies, many of which are currently trading at 9x and yielding 5%.
Education is key to investing in Vietnam and the Client Group seeks to support FOs throughout the investment process, from the initial legal due diligence to setting up accounts, discussing specific investment opportunities and also trying to ensure a clear understanding of the market, politics and the economy.
“Dragon Capital has an appreciation of the individual needs and standards expected by FOs, particularly in the areas of corporate governance, compliance monitoring and risk management”, Dominic Scriven said.
For the purpose of management and maintenance of portfolio assets Dragon will:
Regular portfolio performance reviews and mandate adjustments are supported by Dragon’s research team, portfolio managers and in-house economists.
The depth and quality of the members of Dragon Capital’s research team is unparalleled in Vietnam and give them a unique insight into the operations and performance of the listed and un-listed corporate sector, this includes: fifty investment professionals including Fulbright scholars, PhD’s, economists, industry and securities specialists across all asset classes.
Dragon currently manages six funds so investment opportunities will be managed pari passu:
Equal treatment will be given to any pool of capital where an investment opportunity would fall within the investment guidelines of similar funds
Dragon will use reasonable commercial efforts to allocate such investment opportunities in a manner considered equitable in all circumstances
Equitable treatment shall include, where appropriate, allocating part of the investment opportunity
Dragon has demonstrated a four year track record of allocating between country funds and other managed accounts
For more information please contact:
Dragon Capital Group Limited
1901 Me Linh Point, 2 Ngo Duc Ke,
District 1, Ho Chi Minh City, Vietnam
T: +84 8 3823 9355
F: +84 8 3823 9366