Jen Capital, a firm managing real estate investment activity on behalf of Hong Kong electronics company Chiphua Group, has begun raising up to $200 million (€130 million) for a Vietnam-focused real estate fund.
Fund manager Jonathan Cheng said that Jen Capital Vietnam Property Fund I would not be restricted to the two main hubs of Ho Chi Minh City and Hanoi, but would also look to secondary cities.
So far, just two private equity firms have launched Vietnam dedicated property vehicles. Hong Kong alternative asset manager Pacific Alliance Group has launched a $633 million fund through subsidiary, VinaCapital, while local firm Indochina Capital has two dedicated Vietnam property vehicles under its management. Singapore-based proeprty developer Capitaland has also formed a partnership with Citi Private Bank to launch a $300 million Vietnam property fund of which it has a 30 percent stake.
Cheng stressed the fund would develop projects rather than go out looking for local operating partners. “People have to be very careful in Vietnam about the risk involved in putting up a building,” he said. “First time partnerships with developers can often go wrong. Since we are developers ourselves we don’t see the need to take that risk.”
Cheng is targeting European institutional investors in the first place. He is telling investors that the fund will focus mostly on residential opportunities, but will also keep an eye open for office, retail and hospitality opportunities. It has a residential project in Ho Chi Minh City in the pipeline as a seed investment for the fund.
Jen’s parent company, Chiphua, was founded 80 year ago and began life as a metal stamping factory. However since then it has grown into one of the largest privately held group of companies in Hong Kong with a sizeable real estate program which has been investing in real estate since the 1960's.
The company has been investing in real estate in Vietnam since 1993, having acquired the Saigon Tower in Ho Chi Minh City and developed a township project called Saigon Sports City outside the capital.