VinaCapital Vietnam Opportunity Fund Ltd (“VOF”) is a closed-end investment company traded on the Main Market of the London Stock Exchange. The ticker is VOF.
The shares of VOF trade on the Main Market of the London Stock Exchange. Your broker should be able to access this market and purchase shares. Investors in some jurisdictions, such as the United States, may need a certified investor status before purchasing shares. Please contact your broker for more details.
VOF is a Guernsey-incorporated company with limited liability. VOF is traded on the Main Market of the London Stock Exchange. The company is a closed-end investment company that does not have any staff but does have a board of directors who are all independent of the investment managers. VOF is managed by VinaCapital Investment Management Ltd, a Cayman Islands company that is wholly owned by VinaCapital Group. The majority of the VinaCapital Group’s staff are based in Vietnam.
The treatment of VOF for tax purposes depends on each investor’s specific situation. Although VOF operates in many respects as a fund, we understand that investors in some European jurisdictions classify VOF as a company for tax purposes, on the basis that investors have no short-term redemption rights. Please consult your tax advisor for more specific details in respect to this matter.
VinaCapital Investment Management Ltd (“VCIM”) is the sole and exclusive investment manager of VOF, subject to a management agreement dated 24 September 2003.
VOF is subject to the rules and regulations for investment companies trading on the Main Market of the London Stock Exchange (LSE). The Listing Rules are set by the UK Listing Authority and are available at: www.handbook.fca.org.uk/handbook/LR/. VOF is also subject to the UK Disclosure and Transparency Rules, which are available at: www.handbook.fca.org.uk/handbook/DTR/. These rules and regulations provide for a high degree of transparency and disclosure, which collectively help to protect investor interests. VOF has an independent board of directors, who endeavour to ensure that VOF complies with relevant best practice corporate governance frameworks, such as the UK Corporate Governance Code (the Code) and the Association of Investment Companies Code of Corporate Governance (the AIC Code), which adapts the Code specifically for investment companies.
The Board is responsible for managing the Company on behalf of its shareholders. In order to create and deliver sustainable shareholder value, the Board must establish the objectives and policies of the Group, set the overall strategic direction and ensure it is delivered within an appropriate framework of reward, incentive and control. The Board has at least four scheduled Board meetings each year, and uses a structured agenda to ensure all key areas are reviewed over the course of the year.
Certain responsibilities of the Board are delegated to Board Committees to assist the Board in carrying out its functions and to ensure independent oversight of internal control and risk management. Each Board Committee’s terms of reference set out the specific matters for which delegated authority has been given.
The Board has four committees in operation:
• The Audit and Valuation Committee comprises all independent directors and is chaired by Mike Gray. The committee is responsible for monitoring the process of production and ensuring the integrity of the Company’s accounts. The primary responsibilities of the Committee are: to oversee the relationship with the Auditor and make recommendations to the Board in relation to their re-appointment and to approve their remuneration and terms of engagement; to assess the Auditor’s independence and objectivity and the effectiveness of the audit process; to review the effectiveness of the Company’s internal control environment; to identify, assess, monitor and mitigate the risks associated with the Company’s business; to monitor adherence to best practice in corporate governance; and to review the Company’s whistleblowing arrangements and its procedures for detecting fraud and preventing bribery and corruption.
• The Management Engagement Committee comprises all independent Directors and is chaired by Mr Adams. The Committee’s responsibilities include: reviewing the performance of the Investment Manager under the Investment Management Agreement and to consider any variation to the terms of the agreement. The Management Engagement Committee also reviews the performance of the nominated adviser, Company Secretary, corporate brokers, custodian, administrator and registrar and any matters concerning their respective agreements with the Company.
• The Remuneration Committee comprises all independent Directors and is chaired by Ms Dam. The Committee’s responsibilities include: setting the policy for the remuneration of the Company’s Chairman, the Audit and Valuation Committee Chairman and the Directors, and reviewing the ongoing appropriateness and relevance of the remuneration policy; determining the individual remuneration policy of each non-executive Director; agreeing the policy for authorising Directors’ expenses claims; and the selection and appointment of any remuneration consultants who advise the Committee.
• The Nomination Committee comprises all independent Directors and is chaired by Mr Bates. The Committee’s responsibilities include: reviewing the structure, size and composition of the Board and making recommendations to the Board in respect of any changes; succession planning for the Chairman and the Directors; making recommendations to the Board concerning the membership and chairmanship of the Board committees; identifying and nominating for the approval of the Board candidates to fill Board vacancies; and, before any new appointment is recommended; evaluating the balance of skills, knowledge, experience and diversity within the Board and preparing an appropriate role description.
The company was incorporated on 14 March 2003 with the registration number CR 124038 and with the name Vietnam Millennium Fund Limited. On 17 July 2003 the Company changed its name to Vietnam Opportunity Fund Limited. On 30 September 2003 the Company was admitted to trading on the AIM. The Company changed its name to VinaCapital Vietnam Opportunity Fund Ltd on 11 November 2008.
The Company migrated to Guernsey on 22 March 2016 and has Guernsey registration number 61765. The Company’s registered office is at P.O. Box 255 Trafalgar Court Les Banques St Peter Port GUERNSEY GY1 3QL.
On 30 March 2016 the Company cancelled its listing on AIM and was admitted to trading on the Main Market of the London Stock Exchange.
The fiscal year end is June 30.
The fund managers focus on key growth sectors of the domestic economy, including but not limited to real estate, materials, financial services, healthcare, education, consumer goods, and logistics. The managers seek to capitalise on their broad business network to realise sustainable capital appreciation and provide attractive levels of return for investors. The secondary focus will be on other expanding sectors such as tourism, manufacturing, infrastructure and export sectors where Vietnam has a comparative advantage. The Company will engage in all forms of investment as allowed under the laws of each jurisdiction in which it operates, including but not limited to, listed and non-listed equity, debt, convertible loans, other assets, and other instruments and structures that may be suitable to allow participation in selected investment opportunities.
The fund managers follow a rigorous process in sourcing, analysing and making investments for VOF. The fund managers have extensive networks and knowledge of Vietnam that they leverage to identify investment opportunities. Once an investment opportunity has been identified, the fund managers conduct careful analysis of the company (including strategy, operations, financials, management and risks), and the sector in which it operates. The fund manager’s analysis also includes consultation with the Investment Committee and the investment manager’s Risk Management Committee to ensure that all risks are identified and properly considered. The analysis is presented to the VOF Investment Committee for review and approval; only those opportunities approved by the Investment Committee will be executed. After investing into a company, the fund managers continue to monitor the company to keep apprised of its operational and financial performance, and, where appropriate, to offer assistance to enhance its effectiveness. In some cases, the fund managers will serve as Board and Committee members for investee companies. Throughout the investment cycle, the fund managers actively seek exit opportunities that will allow VOF to meet or exceed target returns. VOF exits investments primarily by selling shares on the stock exchange, or by selling to other investors (i.e. trade sale).
It is intended that the Company’s income will consist wholly or mainly of investment income. The Directors currently intend to reinvest a large part of income to take advantage of opportunities meeting the Company’s investment and return objectives, and where suitable opportunities are not available to distribute substantially all of the Company’s income and capital gains to holders of the Ordinary Shares. The distribution of dividends may be made in the form of a tender offer to all shareholders at NAV for tax efficiency.
VOF has established a share buyback facility, and the Company is actively engaged in share buybacks as part of VOF’s dividend distribution policy.
Yes, the investment manager, VinaCapital Investment Management Ltd (VCIM), and other related parties, such as board members and executives of VCIM hold shares in VOF. The latest holding information can be found on the VOF Fund Information page, under the tab Securities Information and the heading Directors’ Interest in the Company.
The Vietnam Index (VN Index) tracks the performance of the Ho Chi Minh City Stock Exchange and is therefore a comparable index for VOF’s capital markets portfolio. Other Vietnam investment funds that are comparable to VOF include Dragon Capital’s VEIL.
VOF is a widely held company. A list of top shareholders is published on the VOF Fund Information page under the tab Securities Information. However, most shares are held via either Clearstream/Banking or Citivic Nominees (Euroclear). The end holders of these shares are often unknown.
As the Company’s shares are traded on the Main Market of the London Stock Exchange, every member shall comply with the notification and disclosure requirements set out in Chapter 5 of the Disclosure and Transparency Rules Sourcebook of the UK Financial Services Authority Handbook as if the Company were classed as an ‘issuer’ whose ‘home state’ is the United Kingdom. If it comes to the attention of the Directors that a member has not within the requisite period disclosed their holding in the Company, the Company may, inter alia, at the discretion of the Directors, notify the member that their shares in relation to the holding shall not be entitled to a vote, either in person or in proxy, at any general meeting of the Company.
VCIM therefore asks all shareholders to contact us and inform us of your investment in VOF. Furthermore, all shareholders of more than 3% are required to report their shareholdings to the Company for announcement on the Regulatory News Service. These shareholders are also required to notify the Company on any change in shareholding of plus or minus 1% of the total shares of the Company.
The NAV is calculated according to its valuation policy. The financial year-end of the VinaCapital LSE-traded funds is 30 June. Audited annual results are announced and published within four months of this date. Interim results at 31 December receive an auditor review and are announced within three months of this date. VOF calculates its NAV monthly and these are normally announced within ten days of month-end. Highlights of VOF’s valuation policy include: Real estate projects are initially valued at fair value, with any expenses relating to their acquisition expensed in the income statement. Once an investment licence is obtained, or by way of other arrangements VOF has a legal entitlement to an investment property, the investment property is revalued. The valuation process consists of obtaining two or more valuations for each property from independent third-party valuation companies. The valuations are reviewed by the Valuation Committee. At the end of each quarter, the Investment Manager and Investment Committee also reviews all real estate investments for possible impairment based on internal calculations.
The market value of the ordinary shares can fluctuate. Share price, as well as being affected by NAV per share, also takes into account the relevant dividend yield and prevailing interest rates and market sentiment. As such, share price may vary considerably from the underlying NAV, creating a discount or a premium. The greater the difference between share price and NAV, the greater is the discount or premium. VOF has over its history traded at both a premium and a discount. The Company does not have a fixed winding up date and therefore, unless shareholders vote against the continued existence of the company, shareholders will only be able to realise their investment through the market.
VOF is domiciled in Guernsey. Under the current laws of Guernsey, there is no income, state, corporation, capital gains or other taxes payable by the Company. The majority of the Company’s subsidiaries are domiciled in the British Virgin Islands (BVI) and so have a tax exempt status. Some of the subsidiaries are established in Singapore and have offshore operations in Vietnam. The income from these offshore operations is also tax exempt in Singapore. A small number of subsidiaries are established in Vietnam and are subject to corporate income tax in Vietnam.
Base and incentive fees Base fee of 1.5% of NAV. Incentive fees are based on two separate pools of investments direct real estate and all other investments. The incentive fee paid equates to 15% of the increase in the NAV of each pool during the year over a hurdle of 8%. The total amount of incentive fees paid in any one year is capped at 1.5% of the pool’s NAV.
VOF’s NAV and shares are denominated in USD, while VOF’s holdings are predominantly held in VND (the Vietnam dong).