This morning City A.M. sits down with fund manager Andy Ho, a City insider who left his native Vietnam as a boat refugee, only to return two decades later as a global investor.
Ho’s Vietnam-focused investment fund VOF is listed on the LSE’s main market, a member of the FTSE 250 and one of the largest Vietnam-focused funds in the world.
The vehicle does somewhat stand out from the crowd as it takes a multi-asset investment approach, investing in publicly traded companies as well as through private equity.
You left Vietnam as a refugee, you returned as a fund manager. How did that come about?
It is a matter of what “I didn’t want”: I didn’t want to be a paperboy. I didn’t want to be a waiter or a bus boy. I didn’t want to mow people’s lawnI didn’t want to live in the neighbourhood where we first immigrated to, in Connecticut, where I was bullied by the other kids because I was smaller and didn’t speak English.
Fortunately, my family, like many other Asian families, values education as a top priority, and combined with my “I didn’t want” attitude, I was motivated to do well in school. Studying hard and getting the right job propelled my career in a direction that I love. Success is really doing a job that you love and getting paid for doing it.
The fund that you manage, VOF, is listed on the LSE. Why did you pick London over the other financial hubs?
When we launched the fund back in 2003, we selected London because we felt it is the best market to promote Vietnam, raise capital, and offers the highest standards in terms of governance and shareholder protections.
London was and continues to be an ideal gateway for European investors
The UK is a gateway to access a developing market like Vietnam through a closed-end fund like VOF. We have evolved from an AIM-listed fund back then to a FTSE 250 company on the LSE’s Premium Main Market.
Why should City investors from London and the UK pump equity into Vietnam?
Vietnam has many things going for it right now: a young and productive population of 100m that is hungry to create wealth; a strong domestic market that is driven by explosive consumption growth. This is a rapidly growing country with the potential for great investment returns. We expect an average earnings growth of about 30 per cent this year. That’s on top of a stock market that is priced at a very attractive valuation.
That said, investing in a market like Vietnam – just as with other developing markets – carries a certain degree of risk. That’s why it is important to partner or invest with someone who has extensive experience and a deep understanding of the business and cultural norms, as well as access to investment opportunities that are not readily available to most other investors.
What’s unique about the fund I manage is we give our investors exposure to private equity and privately negotiated investment opportunities as well as listed equity, and we also pay a dividend.
The pandemic recovery is slowly starting. Where do you see opportunities to invest and grow?
Vietnam’s economy has proven to be very resilient, even during the pandemic. That said, there are sectors that will take longer to show signs of recovery, such as hospitality and tourism-related sectors.
I see opportunities in healthcare and education, which play into the rising domestic consumption and household wealth creation themes we have always focused on.
At the same time, other sectors have performed remarkably well, including construction materials, real estate, and financial services, and we expect them to continue to grow over the coming year as recovery takes hold. In addition to these sectors,
Tell us about how Vietnam has handled the pandemic, and how this has impacted both yours and VOF’s investment strategy?
In short, Vietnam handled the pandemic quite effectively in the first phase by using a combination of identification, isolation, and communication, which involves locating confirmed cases and their contacts via tracing, sending them to central quarantine facilities, and keeping people informed about how they can prevent the spread. The success of this approach is partly due to the high level of trust Vietnamese citizens have in the government around matters like this.
Can the UK take away any lessons from how Vietnam has handled the pandemic?
I’m not sure Vietnam is in a position to teach any nation about how to handle a pandemic. We got many things right early on, in large part due to experiences in dealing with earlier outbreaks like bird flu a few years ago. Every country and culture is different when it comes to defining personal freedom versus the common good, and the level of trust placed in government guidance. And obviously some countries have greater financial resources to provide high level hospital care and obtaining vaccines.
You recently published your first book – ‘Crossing the Street’ – what inspired you to write this?
The motivation to write this book really comes from over 15 years of meetings with investors and telling them stories about investing in Vietnam. More and more investors are becoming aware of the opportunities Vietnam offers, so this this book allows me to reach a broader audience. It also enables me to put these stories and experiences in writing before I forget them!
And what about the title?
The title comes from the fact that it is fairly difficult to cross the street in Vietnam and getting even more difficult as the economy grows; people are getting wealthier, buying more cars and motorbikes and the streets are congested. But eventually people figure out how to navigate crossing the street, sometimes on their own or after asking for assistance. In a lot of ways, investing in Vietnam has similar challenges, and I hope this book provides some guidance and colour around what it takes to successfully cross the proverbial street that is investing in Vietnam.
What should our readers take away from your book?
Investing in Vietnam is challenging, takes some time, and comes with a high level of risk. But done properly, one can be successful. And success is defined as exiting an investment and realizing a return that surpasses the risk that one took on. In other words, how does one identify, structure, invest in and exit from opportunities with returns commensurate with the risks.