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VinaCapital achieves 23% returns via Hilton sale

The Ho Chi Minh City-based firm has entered the exit stage for its AiM-listed real estate fund, VinaCapital. Including the Hilton Hanoi Opera Hotel sale, the fund has exited 12 investments so far.

VinaCapital Group, the Ho Chi Minh City-based private equity and real estate fund manager, has sold its equity stake in the Hilton Hanoi Opera Hotel for an undisclosed sum.
 
The firm, led by chief executive officer Don Lam, said in a statement today that the sale – which came three years after its AiM-listed real estate fund VinaLand Limited and its opportunity fund, Vietnam Opportunity Fund, purchased the stake – resulted in an IRR of 23 percent over the years of the investment.
 
The firm did not disclose the buyer of the stake.
 
VinaCapital managing director of hospitality, Stephen O’Grady, said: “After the VinaCapital funds acquired a majority stake in 2006 we were able to quickly improve the hotel’s operations and grow profitability. Gross operating profits rose 29.5 percent in two years to reach over $9.5 million in 2008, which was the peak year of Vietnam’s hospitality market.”
 
“We are extremely satisfied to exit this asset at a value that is about 10 percent above the March 2009 book value of the property – used to calculate the net asset values of our funds,” he said.
 
Lam told PERE this week that VinaLand Limited had entered its exit stage. He said: “VinaLand entered its exit stage returns on the first 12 projects of 47 percent IIRR.”
 
The firm’s follow-up real estate fund will be its first private equity style fund focused on the sector. Fundraising for the vehicle, which is targeting more than $350 million, is expected to start next year.