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| Vietnam Pioneer Fund Limited |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 27352 |
| Company name | Vietnam Pioneer Fund |
| Country | Vietnam |
| Sector | Collective Investment Vehicles |
| Environmental category | FI |
| Department | Private Equity and Investment Funds |
| Status | Pending Approval |
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| Date SPI disclosed | September 29, 2008 |
| Projected board date | November 3, 2008 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| IFC proposes to make an aggregate equity investment of up to $20 million for up to 20% of the total commitments in Vietnam Pioneer Fund Limited ("VPF”, “the Fund"). IFC will not be the largest single investor in the Fund. The Fund, with target size of $100 million, is structured as a closed ended entity domiciled in the Cayman Islands and managed by Vietnam Pioneer Partners (“VPP”, “The Fund Manager”), a limited liability company incorporated in the British Virgin Islands. |
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| Project sponsor and major shareholders of project company |
The Fund will be managed by VPP, the Fund Manager, led by Mr. Viet Hung Do (see bio below) with current staffing of 12 Vietnamese finance and investment professionals. The Fund Manager will be supported by two key sponsors, Mr. Trung Ha Nguyen and Ms. Hoa Thi Dinh, two Vietnamese professionals with extensive experience in Vietnam as entrepreneurs, investors, and company operators. The Fund believes that good investment opportunities exist in Vietnam in two distinct categories:
- Private growth companies: the Fund intends to invest part of its assets in unlisted Private companies operating in high-growth and transformational segments of the Vietnamese market; and
- Equitization of SOEs: the Fund intends to invest part of its assets in SOEs during or soon after their privatization. |
| Total project cost and amount and nature of IFC's investment |
| The Fund’s target size is $100 million. IFC proposes to make an aggregate equity investment of up to $20 million for up to 20% of the total commitments in Vietnam Pioneer Fund Limited ("VPF”, “the Fund"). IFC will not be the largest single investor in the Fund. |
| Location of project and description of site |
| The Fund is structured as a closed ended entity domiciled in the Cayman Islands and managed by VPP, a limited liability company incorporated in the British Virgin Islands. VPP will have operations primarily in Vietnam with advisory and support services primarily in Thailand and Singapore. |
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| Anticipated development impact of the project |
An IFC investment in the Fund is expected to deliver the following development impact:
- Stimulate private sector growth – the Fund is expected to expand access to financing by private enterprises (including SMEs) and promote SOE privatization in Vietnam;
- Improve corporate governance – the Fund is expected to help portfolio companies adopt better practices in corporate governance, environmental and social standards; and
- Develop non-bank financial institutions – the Fund, if successful, will prove the viability of private equity as an asset class in Vietnam and encourage more private equity funds to be established in the country. |
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| IFC's expected development contribution |
IFC’s expected development contribution includes:
- Capital mobilization – IFC’s commitment will help a first-time fund attract capital and reach a critical fund size;
- Market support – given the current macro challenges facing Vietnam, IFC’s participation in the Fund will send a strong signal demonstrating IFC’s confidence as well as long-term commitment to the Vietnamese market; and
- Governance oversight – IFC expects to have a seat on the Fund’s Board of Directors and to play an active role in ensuring the Fund adopts best practice fund management and governance. |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. During appraisal, IFC will analyze the Fund’s expected portfolio and sectors of investment and determine the Applicable Requirements if any, that would include a combination of:
• The IFC FI Exclusion List; and/or
• The applicable National Social and Environmental Laws and regulations; and/or
• The IFC Performance Standards
IFC will also review, if required, the capacity of the Fund to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). IFC may suggest Supplemental Actions to address any gaps in the SEMS if required. The Fund Manager will be required to:
• Develop, or upgrade, if necessary, any existing SEMS, prior to disbursement to the satisfaction of IFC;
• Identify responsible, qualified persons to manage and implement the SEMS;
• Commit to implement the SEMS to ensure that its investments/activities are in compliance with the Applicable Requirements;
• Take action to remedy any gaps in SEMS implementation on an ongoing basis; and
• Submit a periodic report to IFC as per a format to be provided by IFC |
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| For inquiries about the project, contact: |
Mr. Viet Hung Do
Vietnam Pioneer Partners
Loyal Office Building (9th Floor)
151 Vo Thi Sau Street, Ward 6, District 3
Ho Chi Minh City, Vietnam
P: +84 (8) 820 89 75,
F: +84 (8) 820 89 72 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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