Excelsior Capital Vietnam Private Equity Fund

Equity : January 2020

Excelsior Capital Vietnam Private Equity Fund is a private-equity fund focused on Vietnam.

Amount

€ 8,733,600.00

Type of investment

Equity

Development impacts

  • Local economic growth
  • Private sector consolidation/innovation
  • Access to basic services & goods
  • Promotion of ESG best practices

Beneficiary locations

Asia: Vietnam

Investment field

Investment Companies & Funds

Activity

SME Fund

Organisation

Excelsior Capital Vietnam Private Equity Fund

The Excelsior Capital Vietnam Private Equity Fund is a private-equity fund that will primarily invest in established, larger SME or mid-sized businesses incorporated in Vietnam or regional companies that have significant financial and commercial ties to Vietnam.

The Fund will invest in approximately 10 businesses that demonstrate potential for market leadership in their respective industries, produce attractive operating results, and are sufficiently scalable to facilitate an exit via a trade sale or listing.

The Fund will target sectors where the fund manager has a proven track record, including education, healthcare, industrials, clean tech, food/ agribusiness, media, as well as consumer product sectors. Moreover, Excelsior will differentiate itself from local competitors by offering both domestic and cross-border expansion to its investee companies through its deep relationships with Korean and other North Asian companies with a strong interest in Vietnam, by identifying potential strategic and exit partners.

Development impacts

  • Local economic growth

    The Fund will provide capital and operating support to well-established SMEs and medium-sized businesses ensuring the continued growth of these companies.

    The Fund will support job creation in formalized companies. According to the Fund Manager assumptions, employees from companies in the current investment pipeline will likely increase from approximately 1.000 employees to approximately 3.000 over 5 years.

    The Fund is expected to create “more”, but also “better” jobs, and the fund manager is also expected to encourage the upskilling and training of employees.

  • Private sector consolidation/innovation

    With relatively few PE funds active in the country, there is a limited supply of institutional private capital for SMEs in Vietnam (especially in this ticket range). The Fund is expected to service the important untapped market demand for stable and long-term capital from small- and medium-sized companies, as conditions governing access to credit are still strict and short-term loans are still strongly favoured by local banking institutions.

    By joining the Fund, BIO will support the creation of a new Vietnam-based PE Team and strengthen the relatively limited PE industry in the country.

    Excelsior’s cross-border strategy and relationships with North Asian partners is expected to play an important role in bringing in foreign capital and advanced technologies, creating positive spillover effects for the local economy. The strategy would allow Vietnamese companies to further integrate in more sophisticated North Asian supply chains, as well as diversify their end-markets.

  • Access to basic services & goods

    While the fund is sector agnostic, the most active pipeline deals are in BIO’s priority sectors, such as education and healthcare. In most cases, the services and products provided would be reliable, affordable for the middle-class population and would tend to be of higher quality with respect to local standards.

  • Promotion of ESG best practices

    The Excelsior Group is committed to promote ESG best practices and has received the support of BIO, FMO and Obviam in this respect. The Team is expected to strongly improve the professionalization of its investees, such as improving labour conditions by requiring the formalization of jobs, as well as encouraging the upskilling and training of employees, particularly on E&S matters.

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