Mekong Capital was founded in 2001 by 29 year-old Chris Freund who had 3 goals at the time: a) to live in Vietnam, because he just loved Vietnam and its people; b) to set up his own business, because he didn’t want to work for a boss who told him what to do; and c) to do Private Equity, because he saw the opportunity in Vietnam to invest into companies and add a lot of value. Fortunately for Chris, he was very successful at enjoying living in Vietnam, and was able to set up a business. Unfortunately, he wasn’t very effective when it came to choosing which private companies to invest into, or how to add value to them. And he certainly didn’t know how build or lead a team. Of course, Chris has done a lot of research and had a lot of knowledge about the investment landscape in Vietnam, but it didn’t prepare him at all for what awaited.
For the first 5 years Mekong Capital made an ongoing series of mistakes, and didn’t get many things right. Mekong’s first fund invested mainly in family-owned businesses, which proved very difficult to change or build up their management team. Further, Mekong invested mainly in export-oriented manufacturing businesses, which were cyclical and also proved difficult to capture much shareholder value given they typically didn’t own anything of strategic value (like a brand, a distribution channel, intellectual property, etc). Compounding the problems, Mekong was not effective at adding value to its investments. So it didn’t start off very well.
Confronting the facts that Mekong was not headed for success, in December 2007 Mekong engaged on a transformation journey. At first it was not easy. We struggled. Some employees left, while others were attracted by what we were creating. By 2010 the initial transformation process was complete. We could already see a dramatic improvement in our performance. Since then, the journey of transformation and reinvention has continued, and even accelerated in recent years.
From Mekong’s second fund (Mekong Enterprise Fund II) onwards, Mekong Capital’s current model emerged. Mekong Enterprise Fund II’s 2007 investment in MobileWorld ultimately delivered a 57 times return on that investment, and became one of the inspirations for the Vision Driven Investing framework.
Here is what has emerged today:
Mekong Capital invests exclusively in Vietnam. We invest in Vietnam not because it is a better place to invest (although it is), but because we love Vietnam and are committed to the future of Vietnam.
Mekong Capital invests exclusively in Private Equity. This is simply because of our commitment to adding value as an investor. Private Equity provides access to adding value that other investment styles do not provide.
Mekong Capital invests exclusively in consumer driven businesses. Consumer driven businesses are what have consistently worked best for us in the past. Also, our focus on consumer driven businesses has enabled us to develop a deep level of specialized insight into what drives success at these businesses, not for peddling solutions and best practices, but to inform us where to look and what questions to ask, so that our investee companies can inquire and discover for themselves what is necessary for them to achieve their Vision.
Mekong Capital has the most extensive Private Equity track record in Vietnam. Our funds have completed 40 private equity investments, of which 27 have been fully exited. Mekong Capital has advised 5 funds, two of which are currently active.
Mekong Capital’s investee companies have typically been among the fastest growing companies in Vietnam’s consumer-driven sectors such as retail, restaurants, consumer products and education. Some of our well-known investment success stories include MobileWorld, Phu Nhuan Jewelry (PNJ), ICP, Golden Gate, Vietnam Australia International School (VAS), Masan Consumer, Traphaco, Pharmacity, F88, YOLA, Pizza 4P’s, Vua Nem, ABA Cool Trans and Nhat Tin Logistics.
Our team includes 60+ full-time people in our offices in Ho Chi Minh City and Hanoi. Mekong Capital is led by four Partners with a combined more than 57 years’ experience in our firm. Mekong Capital has been a pioneer in building a powerful corporate culture, a strong team which provides access for delivering breakthrough results.
Since 2009, Mekong Capital has a strong and consistent track record of adding value at its investee companies through our Ontological Private Equity approach, and our Vision Driven Investing framework. We work closely with our investee companies to empower them to create a clear vision for their future, a clear pathway, and to build the management team and corporate culture necessary for achieving their vision, as well as other critical infrastructure and approaches for growing quickly and achieving their vision.
Mekong Capital’s transformation, culture and investment approach have been the subject of numerous case studies and media coverage, such as this 2019 feature story by Bloomberg Markets magazine: A New-Age Corporate Culture Transformed a Fund Manager’s Fortunes.