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Dragon Capital – VEIL
25 years investing in Vietnam: A fresh commitment to ESG


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September 2020 marked exactly 25 years since the establishment of Vietnam Enterprise Investments Ltd (VEIL) and 26 years since the founding of Dragon Capital. With an initial close of US$16.39 million, provided by a score of well-known institutional investors, family and friends, VEIL was at that stage the newest, and also the smallest, of a clutch of Vietnam funds, all seeking to capitalize on the recent collapse of the US embargo on Vietnam and 20 years after the final reunification of this proud country, in 1975. VEIL is now a member of the FTSE250, and at $1.4 billion, the largest, and the oldest, of all specialist vehicles investing in Vietnam, globally. The persevering few who invested $1.00 at the outset now have just short of $7.00 per share, marking a currency-adjusted, net-of-fee, compounded annual return of 10-11%, over those 25 years.

VEIL’s survival to today is itself a success of evolution, of adaption to different times, of continued redefinition of relevance and purpose. The early days were entirely of private investing; and thereafter moving those private companies to nascent public markets: Vietnamese investees asked for partnership, meaning at one stage VEIL’s manager, Dragon Capital, was involved in as many as 44 company boards. As markets deepened, we were able to promote and participate in state-owned enterprise privatisations, and the success of these in turn attracted private companies to IPO. Board representation by Dragon Capital is today eschewed in favour of regular engagement with senior management by members of the investment team as we believe it increases our flexibility in managing money.

Today, VEIL is the biggest institutional provider of equity capital in Vietnam. This brings with it a responsibility to act in the interests of multiple stakeholders, to promote good corporate governance, and to iron out market inefficiencies. We look to a future of continuing opportunity in Vietnam, and in its public companies, as they create jobs, investment, and profits and dividends for shareholders. Covid-19 is one more draining challenge to face, but through this abyss, VEIL has renewed advocacy of improved risk management, prudence and sustainability, and of a reset in the tenuous balance we maintain with the environment. Dragon Capital practices ESG management at the investment team level where it is an integral part of the investment process.

To celebrate the 25th anniversary of the fund manager, Dragon Capital established funding of only the second Chair globally in the study of Biodiversity Economics, seeking to answer the question: ‘How can markets value the absence of birdsong?’

The Chair aspires to develop economic values for biodiversity, and equally, establish how markets can reflect the intergenerational dimension of these values. The eventual goal is to reward, and disincentivise, different behaviours towards the natural, vital, richness of our planet. Is biodiversity really priceless?


The views expressed in this article should not be taken as a recommendation, advice or forecast. We are unable to give financial advice. Nothing in this article is intended as an offer or solicitation for the purchase or sale of securities in Vietnam Enterprise Investments Limited.

Past performance is no guarantee of future returns. The price of shares and the income from them may fluctuate upwards or downwards, and cannot be guaranteed. The data in this presentation has been obtained from sources we believe to be reliable, but we cannot guarantee or be responsible for their accuracy or completeness. Unless otherwise indicated, all information is current as at 30 October 2020.