HCM CITY (VNS)— Dragon Capital, the Vietnamese investment manager, announced yesterday that it would merge two shareholding classes in its Vietnam Debt Fund (VDeF).
Following a meeting of the shareholders in Hong Kong on January 27, it was agreed that all of the assets of the A Class Segregated Portfolio will be transferred to the B Class Portfolio.
The objective of the merger is to create a larger aggregate portfolio, increasing trading and risk management efficiency. The combined portfolios will have a NAV (net asset value) of US$38.5m.
Launched in November 2007, VDeF is open-ended and its strategy centres on active management seeking high sustainable returns in Viet Nam's debt markets.
While the A class portfolio's mission has been to invest in government debt, the B class portfolio has a broader mandate including corporate debt.
The fund is registered in the Cayman Islands and listed on the Main Securities Market of the Irish Stock Exchange in Dublin.
The VDeF fund has performed strongly over the past three years with the B Class Portfolio providing USD annual returns of 10.36 per cent and the A Class Portfolio returning 9.25 per cent.
Consequently, the fund's two share classes were ranked first and second in Camradata's recent Emerging Market Corporate Debt report.
"The larger size of the combined portfolios will allow for greater flexibility in our investment strategy, make risk management easier and reduce the expense ratio, which is a heavy burden for small sized funds," said Dan Svensson, portfolio manager of the Vietnam Debt Fund.
Dominic Scriven, CEO and co-founder of Dragon Capital, said: "This merger of the two portfolios makes good strategic sense for Dragon Capital and enables us to build on the success that the VDeF has already achieved since 2008. VDeF and its local affiliate VFB have consistently delivered market leading performance. We are optimistic that this merger will allow us to continue delivering strong returns from Vietnam's debt markets."
Founded in 1994, the Dragon Capital group is an investment company with two decades of investing experience in Viet Nam. Dragon Capital and its affiliates manage in the region of US$1.1bn in assets across public equities, private capital, clean development, fixed income and property. Shareholders comprise international agencies such as the World Bank Group, Proparco and the company's own founders, management and employees. — VNS