Mekong Enterprise Fund II

The Mekong Enterprise Fund II is a $50 million private equity fund, which is domiciled in Mauritius. The fund was launched in June 2006 after being oversubscribed in its first closing.

The Fund aims to achieve an attractive Net IRR by investing in the equity of Vietnamese private and equitized (formerly state-owned) companies, with a particular aim to invest in the most well managed private companies in Vietnam. The Fund will focus mainly on companies which have a serious plan to list on a stock exchange in Vietnam, and which have demonstrated a high level of commitment to continuous improvement.

The Fund’s primary focus is minority investments, usually representing 20% to 30% of the equity, in unlisted private companies – aiming to invest in the most well managed private companies in Vietnam. However, the Fund may also invest in equitized companies, and in foreign-owned companies in Vietnam. It may also engage in buyouts, in which the Fund, either alone or in conjunction with third parties, takes a controlling equity interest in a private or equitized company.

The Fund also has the ability to invest in the securities of companies domiciled in, or having significant operations in, Cambodia and Laos. However, there is no obligation on the Fund to invest in Cambodia or Laos.

Life of the Fund

The expected life of the Fund is 10 years from June 2006. When the Fund makes an investment, it expects to hold the investment for 5 to 7 years, but it could be longer or shorter depending on the circumstances.

Differentiation from Other Funds

The Fund is unique from other investment funds looking for investments in Vietnam in the following ways:

1. The Fund invests mainly in private sector companies founded by local entrepreneurs;
2. The Fund targets a smaller average investment size than regional private equity funds;
3. The Fund provides significant levels of value-added assistance to the companies in which it invests, including helping companies make the changes necessary to prepare for successful listings;
4. The Fund had a focused investment strategy targeting mostly manufacturing, consumer products, retail and distribution;
5. The Fund aims to only invest in companies that have strong management teams and a commitment to continuous strengthening of their management teams;
6. The Fund is very selective about the investments that it makes, preferring to make fewer investments in order to only invest in excellent companies with a high likelihood of being successful investments.

Fund's Legal Form

The Fund is domiciled in Mauritius. The Fund is not listed on any stock exchange.