What is in store for PE investors in 2017?

Private Equity investment in Vietnam remains a significant driver behind Vietnam’s economic growth. The sentiment expressed by those operating in the Private Equity sector has an important impact on the economy as a whole, which this survey seeks to measure.

In this our 16th survey on the Private Equity sector, carried out in March 2017, the majority of respondents (78%) were positive about Vietnam’s economy.

2016 was a year filled with market volatility which could create a negative impact on Vietnam’s business environment. China, the largest trade partner of Vietnam, has been experiencing an economic slowdown. In addition, the expected demise of TPP after President Trump decided to withdraw from the agreement caused significant concerns about foreign trade and investment in Vietnam.

In this survey, the respondents expressed optimism towards Vietnam investment outlook with regards to the acceleration in investment attractiveness and level of investment activities, while Vietnam is chosen to be the second most preferred destination for PE investors in SEA.

In terms of attractive industries, the “Transportation and logistics” sector gained more interest from PE investors, increasing 7% compared to our last survey. Meanwhile “Retail” sector and “Food and Beverage” (F&B) sector still maintain the top two most attractive sectors for Private Equity transactions according to our respondents.

“Corporate Governance” remains a substantial concern for PE investors and cited as the most likely area requiring hands-on performance.

Thanks to recent government’s resolutions towards equitisation, “SOE equitisation” has returned to be the most significant source of deals, accounting for the majority of 52%.

When investing in Vietnam, dealmakers consider various factors to facilitate their investment. “Economic growth” and “Sector specific opportunities” are considered the top two opportunities to invest in Vietnam. Meanwhile, "Difference in valuation expectations" and “Resistance to sharing deal risk” are the top deal breakers for PE investors.

With an optimistic view of the Vietnam economy, in spite of the turmoil in the economic situation in 2016, we are looking forward to steady growth in Private Equity investment in the upcoming 12 months.

What is in store for PE investors in 2017?