While some investors have gone sour on Vietnam amid a string of financial upheavals, stock market slides and poor economic data, one group which seems more optimistic than ever is KKR – at least on Vietnam’s manufacturing sector and the market for pungent fish sauce, chilli and soya sauces, instant coffee and noodles.

The US buyout group on Tuesday agreed to invest a further $200m in one of Vietnam’s largest food companies, Masan Consumer. The deal amounts to the biggest single private equity investment in Vietnam and follows KKR’s initial investment of $159m in Masan Consumer in 2011.

Little wonder it looks attractive. Over the past three years, Masan’s revenue has grown from $190m in 2009 to over $500m in 2012, making Masan one of the fastest growing fast-moving consumer goods companies in the Asia-Pacific region, as chief executive Madhur Maini likes to point out.

KKR’s swelling stake in Masan is the group’s only investment in Vietnam and its largest investment in southeast Asia. “Doubling our investment in Masan Consumer in less than two years represents our confidence in Vietnam’s consumption growth story that has just started to unfold,” said Ming Lu, KKR’s regional Southeast Asia head.

The latest investment also secures KKR the right to a second seat on Masan’s board after the buyout group gained one of the company’s eight seats in its 2011 investment deal, and paves the way for the group’s plans to diversify into other FMCG categories. The deal hinges on KKR’s strong relations with Masan’s parent company, Masan Group, which owns about 76 per cent of Masan Consumer.

KKR might well be onto something. Despite Vietnam’s sputtering economic performance, the country’s ministry of planning and investment announced last week an ambitious goal to attract total foreign direct investment pledges of $13bn-$14bn this year, compared with $13bn last year.

In a further sign of Vietnam’s determination to woo back foreign investors, the country’s State Securities Commission is considering raising the foreign-ownership limits on some companies, among other measures it is planning to boost the country’s equity markets.

According to a statement from the commission on Tuesday, the regulator will launch a pilot scheme to enable foreign investors to own more than 49 per cent of some companies. The stock market rose 2 per cent in response, extending gains for an 11th consecutive trading day after more than a year of sluggish performance.

Amid much glowing rhetoric about the “Asian century” and growing investment opportunities in the region, KKR is among the relative handful of western investment companies that is putting money where its mouth is. The group has invested more than $5bn across the Asian-Pacific region in recent years – nearly 20 per cent of it in Southeast Asian companies – and opened a Singapore office to facilitate dealmaking in Southeast Asia.

The firm is also near to closing a new $6bn pan-Asian investment fund, which if it reaches its target will be the largest ever such fund for the region.

Related reading
Deal of the day: angling for acquisitions, KKR goes fishin’ in Vietnam, beyondbrics
Multinationals: off the pace in Asia, beyondbrics
KKR to Yageo: worth a try, beyondbrics

Copyright The Financial Times Limited 2024. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Follow the topics in this article