Vietnam Enterprise Investments Limited (‘VEIL’) is a closed-end fund, incorporated in the Cayman Islands and trading on the Main Market of the London Stock Exchange.
Launched in 1995, VEIL is the longest running fund focused on Vietnam and one of the largest which invests primarily in listed and pre-IPO companies in Vietnam that offer attractive growth and value metrics, and strong corporate governance.
VEIL’s objective is to seek medium to long term capital appreciation of its assets.
VEIL seeks to achieve its investment objective by investing in companies primarily operating in, or with significant exposure to, Vietnam. Whilst the Company's portfolio will reflect a focus on Vietnam, the Company may also invest up to, in aggregate, 20 per cent of Net Asset Value at the time of investment, in companies operating in, or with significant exposure to Cambodia and Laos.
VEIL expects that the majority of the investments comprising the portfolio will be equity securities admitted to trading on the Stock Trading Center of Vietnam in Ho Chi Minh City, the Hanoi Stock Exchange, or on another stock exchange. VEIL may, nonetheless, invest in unlisted equity securities and listed or unlisted debt securities or loan instruments.
The companies in which VEIL will invest may have any market capitalisation and may operate in any industry. In respect of the debt securities in which VEIL may invest, these may be fixed or floating rate and may have any credit rating or may be unrated.
VEIL may seek exposure to securities directly or indirectly and VEIL may use derivatives for investment purposes and efficient portfolio management. VEIL may invest in investment companies that have, as their main objective, a focus on investing in securities falling within the VEIL’s investment policy. Investments in other investment companies will not exceed 10 per cent of Net Asset Value at the time of investment.
VEIL does not intend to take legal or management control of any investee company. VEIL may also hold cash or other short term investments such as commercial paper or certificates of deposit. Under normal market conditions, it is expected that VEIL will be substantially fully invested in investments meeting its investment policy. However, where considered prudent to do so (for example, in the event of a lack suitable investment opportunities or in times of falling markets or market volatility), VEIL's portfolio may reflect a significant weighting to cash or other short term investments.
VEIL will observe the following investment restrictions in each case calculated at the time of investment:
(a) no more than 20 per cent of the gross assets of the Company may be exposed to the creditworthiness or solvency of a single counterparty;
(b) no more than 20 per cent of the gross assets of the Company may be invested in any one issuer; and
(c) no more than 40 per cent of the gross assets of the Company may be invested in any one industrial sector.
VEIL is permitted to borrow money and to charge its assets. VEIL will not have aggregate borrowings in excess of 20 per cent of the Company's Net Asset Value at the time of borrowing.
VEIL may borrow for the purposes of capital flexibility, including for investment purposes.
The Board will oversee the level of gearing in VEIL, and will review the position with the Investment Manager on a regular basis.
The VEIL Board has considered the principles and recommendations of the AIC Code of Corporate Governance published by the Association of Investment Companies (the 'AIC Code') by reference to the AIC Guide. The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Corporate Governance Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to VEIL as an investment company.
The VEIL Board considers that reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the UK Corporate Governance Code) is appropriate for VEIL and its shareholders.
The UK Corporate Governance Code includes provisions relating to: the role of the chief executive; executive directors’ remuneration; and the need for an internal audit function. For the reasons set out in the AIC Guide, the VEIL Board considers these provisions are not relevant to the position of VEIL, being an externally managed investment company, and VEIL does not therefore comply with them.
VEIL's audit committee is chaired by Stanley Chou and also comprises Gordon Lawson and Derek Loh as members. The audit committee meets at least twice a year. The audit committee examines the effectiveness of VEIL's internal controls. It helps the Board in discharging its responsibilities with regard to the approval of financial statements and also monitors and reviews the relationship with VEIL's external auditor.
VEIL has also established a combined management engagement, nominations and remuneration committee which is temporarily chaired by Derek Loh and also comprises the chairman of the Board, Wolfgang Bertelsmier as a member. The management engagement, nominations and remuneration committee meets at least once a year, or more often if required. The principal roles of the committee are to evaluate the performance of VEIL's Investment Manager and consider the framework and policy for the remuneration of the VEIL Directors and the structure, size and composition of the Board on an annual basis.
|investee company||% of nav||sector||description|
|ASIA COMMERCIAL BANK (ACB)||8.27%||Banks||Top private retail bank in Vietnam|
|MILITARY BANK (MBB)||6.39%||Banks||A top-5 commercial bank in terms of total assets, with the most confortable asset quality|
|KHANG DIEN HOUSE (KDH)||5.93%||Real Estate||Pioneer of gated communities in Vietnam, with Saigon's biggest land bank|
|MOBILE WORLD (MWG)||5.85%||Retail||No-1 Retail player in Vietnam with 827 stores selling mobile phone, 42 stores selling electronics and new entrance to grocery chains.|
|VINAMILK (VMN)||5.65%||F & B||No-1 dairy producer with 50% market share|
|SABECO (SAB)||5.15%||F & B||Vietnam's leading beer producer|
|PV GAS (GAS)||4.03%||Energy||Monopoly gas distributor in Vientnam|
|HOA PHAT GROUP (HPG)||3.26%||Materials / Resources||No-1 construction steel manufacturer, cost leader and fully integrated|
|AIRPORTS CORPORATION OF VIETNAM (ACV)||3.24%||Transportation||Monopoly airport operator, managing 22 airports in Vietnam|
|FPT CORP (FPT)||3.19%||Software / Services||No-1 IT services firm. operating in telecom, software, infosys and distribution|