The stock market gloom has had its impact on their performance, but a demand exists to acquire large stakes in fund management firms, market observers say.
In March, the executive board of the Hoa Binh Securities Company approved a plan to take a 51 per cent stake in An Phu Fund Management, established in 2006 with a charter capital of VND25 billion (US$1.2 million).
Meanwhile, the Maritime Joint Stock Bank is close to completing the purchase of Tin Phat Fund Management Company after which the company will be renamed. Tin Phat was set up in 2008, mostly by individuals, with a charter capital of VND26 billion ($1.24 million). Although details of the deal are not available at the moment, it is said that the founders are making significant losses on the sale.
Hoang Minh Son, General Director of OTC Viet Nam, a joint-stock company, said the website, .com had many purchase orders for stakes in small fund management firms with less than VND40 billion ($1.9 billion) in charter capital.
"Three companies wanted to sell their stakes in 2008 because it was not easy to mobilise capital due to the financial crisis then, and the Ministry of Finance then increased the minimum charter capital requirement," said Phan Xuan Can, general director of the Viet Nam Financial Investment Company.
He said another reason for the desire to sell was that the founders of these companies were not experienced in the field. The sale failed.
Since late last year, demand had increased and successful deals had been struck, mostly with banks as buyers and individual shareholders of fund management firms as sellers, Can said.
The chairman of a HCM City-headquartered fund management company, who did not want to be named, said he was negotiating a deal at higher-than-par prices. He told Viet Nam News that banks were looking to expand their business into fund management.
With such fund management firms as affiliates, the banks would be able to mobilise capital for other activities, like real estate development projects, for instance, he said.
Commercial banks are not directly allowed to raise funds for such projects.
He also said that the Government was set to tighten requirements for the establishment of fund management firms.
The chairman said the pervading stock market gloom would make the deals (to acquire stakes in fund management firms) cheaper and thus more attractive to buyers.
One more attraction was that, under the draft decree that will guide the implementation of the amended Securities Law, fund management companies would have additional functions, among others, of setting up securities companies, mobilising capital for property investment funds and managing property investment funds.