A number of foreign investment funds are drawing up plans to expand their investments in Vietnam ’s private sector since many businesses have regained their levels of growth after a long gloomy period due to the global economic downturn.
Dragon Capital has announced its plan to set up a new fund in Vietnam in May with an estimated capital of 45-50 million USD in the first phase and around 100 million USD in the second. The fund will focus on enterprises that operate in renewable energy, power saving and sustainable development.
The Mekong Capital Fund Management Company has said that it is raising capital in the US , Europe and Asia to establish the Mekong Business Fund (MEF) III with an estimated capital of 150 million USD. At present, Mekong Capital has three investment funds operating in the country which have a combined capital of more than 168 million USD and invest in 21 companies across Vietnam.
The Director of Research and Investment at the SME Securities Company Nguyen Viet Hung, said that focusing on private businesses proves that these funds want to grasp every opportunity they can during the first stages of the global economic recovery.
Better business prospects and the recovery have helped to increase confidence in investors, he added.
In the meantime, developing the financial market and finalising the legal system has helped to remove many difficulties for investors who inject capital into Vietnam.
At present, Vietnam boasts more than 200,000 small and medium-sized enterprises, mainly private businesses. The majority of these businesses are in urgent need of capital as State capital is directed at the State’s own economic sector.
Help from these investment funds will be a lifeline for many businesses, said the Sai Gon-Hanoi Investment Fund’s Director of Economic Analyses Nguyen Viet Duc.
Businesses need to address the shortcomings in their administrative capabilities and make information transparent to have a better chance of attracting capital from foreign investment funds, Duc noted.