August 2020
AAM Magazine
August 2020
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Mirae Asset's plan to buy Vietnam fund manager may boost regional competition

Plans by South Korea’s Mirae Asset Global Investments (Mirae Asset) to acquire a Vietnamese fund management firm may step up competition in the Southeast Asian country and, potentially, in the region.

South Korean business daily Pulse Business reported recently that Mirae Asset is planning to acquire the entire stake in Vietnam’s Tin Phat Management Fund Joint Stock Co (Tin Phat).

It’s unclear how much the deal is worth, when it will be completed, and who will lead the asset management team. Mirae Asset's representative in Hong Kong did not immediately respond to questions from Asia Asset Management.

Mirae Asset had US$122 billion of assets under management (AUM) as at December 2017.

The company currently operates in Vietnam via a representative office in Ho Chi Minh City, which was set up in 2006.

According to the Pulse Business report, the planned acquisition also involves Mirae Asset then selling a 30% stake in Tin Phat to State Capital Investment Corp, Vietnam’s national wealth fund.

It cites an unnamed Mirae Asset spokesperson as saying that the deal will "enable (the company) to gain foothold in not only China and Hong Kong, but Southeast Asia at large".

“We plan to bolster our leadership in both traditional assets such as stocks and bonds and alternative investment assets in the region,” according to the spokesperson.

Pong Teng Siew, head of research at Kuala Lumpur-based Interpac Securities, says the acquisition could increase competition in Vietnam’s fund management industry.

"Given Mirae Asset’s size, we may also see Mirae Asset's Vietnam entity being one of the key players to watch for in the region, especially when the Association of South East Asian Nations [ASEAN] Collective Investment Scheme [CIS] framework expands to Vietnam," Mr. Pong tells AAM.

The framework currently allows fund management firms in Malaysia, Singapore and Thailand to offer cross-border funds among the three members countries of the regional grouping.

It has not as yet been extended to the other seven members: Brunei, Cambodia, Indonesia, Laos, Myanmar, Philippines and Vietnam.

There are approximately 47 asset management companies operating in Vietnam, according to the website of the State Securities Commission of Vietnam.  It does not provide their total AUM.

Some of the current players include Dragon Capital Group with AUM of $3.14 billion as at end-2017,  Eastspring Investments Vietnam,  with AUM of $2.45 billion as at mid-2017,  and Vina Capital,  with AUM of $1.8 billion as at end-2017, according to data from their respective websites.