Foreign capital flowing into Vietnamese F&B market
Investment funds have been seeking opportunities to invest in companies which own food & beverage (F&B) chains as they can see the impressive growth rates of the industry.
Reports all show that F&B remains one of the three business fields leading in terms of growth rate and foreign investment attraction.
In late 2015, Louis Nguyen, president and CEO of the Saigon Asset Management Corporation (SAM), said that the restaurant’s operation model has its own outstanding features, and therefore, can attract private investment funds looking for investment opportunities in the F&B sector.
Nguyen mentioned the case of Huy Vietnam which recently successfully called for Series C capital from Asian investors.
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In April 2015, Huy Vietnam received US$25 million from Templeton Asset Management headquartered in Singapore and Welkin Capital from Hong Kong.
Huy Vietnam is the first investment deal made by Welkin under the ‘China + 1’ model.
Established in 2006, Huy Vietnam now owns four restaurant brands, namely Mon Hue (Hue City’s dishes), Pho Ong Hung (Hung’s Pho) and Com Tho Chay (Com Express). It now runs 100 restaurants in large cities in Vietnam.
In fact, Templeton Asset Management and Welkin Capital are not the only investors in Huy Vietnam. According to CrunchBase, since 2013, Huy Vietnam has attracted US$40 million from five investors, including AIF Capital (Series B), Fortress Capital Bhd (series B), New Asia Partners (Series B), and Templeton Asset Management and Welkin Capital (private equity).
Analysts believe that VinaCapital was the pioneer in injecting money into F&B chains. It poured money into Pho 24, owned by Nam An Group.
However, in late 2012, a report of VinaCapital showed that the Vietnam Opportunity Fund (VOF), one of three listed funds belonging to Vinacapital, withdrew the investment from Pho 24 with an unsatisfactory net rate of return, only 1.4, and the gross internal rate of return at 7%.
Meanwhile, the divestment from the Hoan My Hospital made at the same time had a high internal rate of return at 51%.
Also as one of the first finance institutions which injected money into Vietnamese restaurant chains, Mekong Capital has had more satisfactory results. In September 2014, MEF II (Mekong Enterprise Fund II Ltd) successfully withdrew investment from Golden Gate JSC.
Golden Gate had only five restaurants in April 2008, when MEF II pumped capital into it. By September 2014, Golden Gate had 67 restaurants bearing 11 brands.
