Breaking down barriers: The rise of private equity in Vietnam

The private equity (PE) landscape in Vietnam is becoming increasingly attractive to global investors due to improvements in regulations, governance and corporate profiles. In the early 2000s and before, there was very limited PE activity in Vietnam, a market characterized by a shortage of private enterprises and unclear regulatory framework on private investments. It was not until the 2005 Enterprise Law came into effect that Vietnam first established a common legal framework for the establishment and management of both State Owned Enterprises (SOEs) and private enterprises, boosting investors’ confidence for investments in private companies.

Along with the rapid growth of Vietnam’s economy, PE activity has soared since the second half of the 2000s. This can be attributed to a number of factors:

  • Integration with the global economy: Vietnam became a member of the World Trade Organization in 2007, committing to one of the world’s most progressive market access programs. This made Vietnam appear on more PE investors’ radar – in fact, some of the earliest notable transactions involving PE investors in Vietnam occurred in 2007, such as Temasek-Minh Phu and PENM Partners-Eurowindow. Since then, Vietnam has continued to participate in more free trade agreements to become an important node in the global economy.
  • Development of the domestic stock exchanges: The launch and development of HOSE and HNX in the early 2000s provided additional comfort to institutional investors in their consideration to include Vietnam as a part of their mandate. As Vietnam gradually becomes one of the most closely watched frontier markets and is on track to reach emerging market status, the country has continued to draw attention from global PE investors.
  • Easing of foreign ownership restrictions: There has been significant progress in unlocking market access for foreign investors since the early 2000s. Market access restrictions for specific sectors, once challenging to navigate in the past, are now clarified by the 2020 Law on Investment, which officially classifies restricted and conditional sectors in one consolidated source. Foreign ownership limits, once kept at 20%-30% for most sectors, now can be extended or have clear path to be extended to up to 100% for non-conditional, non-restricted business lines.
  • Improvement in corporate profiles: In the earlier days, many private enterprises in Vietnam were small founder-owned, family-run businesses, which lacked both corporate governance of international standards and experience in working with foreign investors. Nowadays, sizable, well-managed private companies are more common – these firms will now consider investments from PE investors as a strategic option in their growth trajectory and have also become more educated in M&A processes.
  • Regulatory landscape improvement: Local authorities have continuously provided clearer guidelines for M&A, as evidenced in various revisions of the Law on Enterprises, Law on Competition, and Law on Investment. For example, the latest 2020 Law on Investment has further addressed the ambiguity of existing regulations and clarified when M&A approval is required – a concern previously highlighted by many PE investors.

From the quiet days when there was only a handful of small value deals in the early 2000s, PE investors have been gradually playing a much bigger role in Vietnam’s M&A market. Larger deals involving PE investors have become more common – there were more than 30 deals valued at US$100m or higher over the last five years[1], while the top ten largest PE transactions of all time in Vietnam all occurred during this period. For Vietnamese businesses, PE funding brings in not only much needed capital for growth or additional liquidity for shareholders, but also important corporate governance guidelines and operational know-how of international standards for optimal value generation. Institutional presence among the cap table would also highlight the legitimacy and sustainability of the business models of local enterprises, which in turn enhance their attractiveness to more global investors.

DateInvestorTargetSectorValue (US$m)Stake
Jun-20KKR’s consortiumVinhomesReal Estate6516%
Oct-18SK InvestmentsMasan GroupConsumer4749%
Aug-18Hanwha Asset ManagementVingroupDiversified403Undisc.
May-21Alibaba, BPEAThe CrownXConsumer4006%
Dec-18Warburg PincusTechcombankFinancial Services3704%
Dec-21TPG, Temasek, ADIAThe CrownXConsumer3505%
Jul-19GIC, SoftbankVNPayTechnology300Undisc.
Jan-19GIC, MizuhoVietcombankFinancial Services2643%
Jun-22Warburg PincusNovalandReal Estate250Undisc.
Jul-21General Atlantic, DragoneerVNPayTechnology250Undisc.
Figure 1: Top ten all-time largest PE transactions in Vietnam

Emerging trends

1. Rising competition in dealmaking from global funds: In the earlier days, most PE transactions in Vietnam involved local funds given their advantages in familiarity with the investment landscape, with examples such as Indochina Capital-Hoang Quan (2006)[2], Mekong Capital-MobileWorld (2007)[3], and VinaCapital-PNJ (2008)[4]. Over time, more and more global PE firms have established local presence in Vietnam, with dedicated investment teams and network of advisors on the ground to start building their track record in the country. While local funds remain active in the market, global funds, with stronger financial capabilities, have been dominating the investment landscape – as evidenced in the list of top ten all-time largest PE transactions in Vietnam

2. Minority vs. control/buyout transactions: Minority transactions are still more popular for PE investors in Vietnam given the lack of onshore deal financing options commonly found in buyout transactions and risk aversion as most funds still have relatively short track record in the country. However, the market has witnessed several buyout transactions in the past, especially in the Healthcare and Education sectors such as CVC-Phuong Chau(2021)[5], BPEA-Vietnam USA Society English Centers (2019)[6], TPG-Vietnam Australia International School (2017)[7], and Navis-Hanoi French Hospital (2016)[8]. From our recent interactions with regional PEs, we understand that there is a growing appetite for control/buyout deals in Vietnam, driven by both record levels of dry powder and the maturation of the investment landscape.

3. Growing importance of ESG topics : ESG topics are no longer considered as a matter of compliance but have become opportunities to unlock value and present key selling points to potential investors. More investors have been appointing specialized ESG advisors for due diligence, while aligning with the target companies on having strong ESG values ingrained in corporate culture as part of deal negotiation and post-deal integration.

Looking ahead – Sectors to watch for PE activity in Vietnam


  • Although consumer confidence is temporarily impacted by the ongoing global macroeconomic turbulence, investors will continue to target Vietnam as one of the most attractive economies in the region.


  • Rising income level and increased health awareness among Vietnamese people will propel demand for private hospital and clinics, in response to the lack of capacity within the national healthcare system.


  • Before the emergence of Covid-19, investors showed significant interest in both local and international private schools.

Financial Services

  • The shortage of financing and credit solutions among an underbanked population is expected to drive investments in Financial Services.


  • Tailwinds from high growth in exports, a booming Internet economy, and supply chain shift from China will continue to propel growth in Vietnam’s logistics industry.


  • Difficulties caused by the pandemic have accelerated progress in digitalization, driving growth in demand across all industries for technology-related services and digital solutions that help businesses improve functionality.

The PE market in Vietnam has changed drastically since the early 2000’s as we have experienced more favourable conditions. Going forward, we expect not only the number of deals to increase, but the size of deals in Vietnam to grow as PE investors seek opportunities.   

[1] Source: Mergermarket

[2] https://vnexpress.net/indochina-capital-mua-cp-hoang-quan-2696691.html

[3] https://www.mekongcapital.com/our-investment/mobile-world/

[4] https://www.investegate.co.uk/vietnam-opp-fund-ltd/rns/investment/200805021205506730T/

[5] https://www.dealstreetasia.com/stories/cvc-capital-phuong-chau-hospital-307941

[6] https://www.globalprivatecapital.org/newsroom/bpea-acquires-majority-stake-in-vus/

[7] https://www.vas.edu.vn/en/news/he-thong-truong-dan-lap-quoc-te-viet-uc-co-nha-dua-tu-chien-luoc-moi

[8] https://www.naviscapital.com/wp-content/uploads/2016/06/Navis-Press-Release-30-June-2016-Acquisition-of-Hanoi-French-Hospital.pdf

[9] https://en.vietnamplus.vn/over-70-of-vietnamese-population-use-internet/231833.vnp

About BDA Partners

BDA Partners is the global investment banking advisor for Asia. We are a premium provider of Asia-related advice to sophisticated clients globally, with over 25 years’ experience advising on cross-border M&A, capital raising, and financial restructuring. We provide global reach with our teams in New York and London, and true regional depth through our seven Asian offices in Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul, and Tokyo. BDA has deep expertise in the Chemicals, Consumer & Retail, Health, Industrials, Services and Technology sectors. We work relentlessly to earn our clients’ trust by delivering insightful advice and outstanding outcomes.

BDA Partners has strategic partnerships with William Blair, a premier global investment banking business, and with DBJ (Development Bank of Japan), a Japanese Government-owned bank with US$150bn of assets. bdapartners.com

Latest insights