From our founding in 2001 until the middle of 2008, Mekong had not made any exits. Some of our investors doubted our ability to exit. In fact, some investors were quite upset that we missed the opportunity to exit some investments in our first fund in 2007 when the market was in a bubble. So the pressure was really on.
Finally, in December 2008, Mekong Enterprise Fund sold its stake in an LPG distribution company, Saigon Gas, to the French oil and gas giant, Total Group, who acquired 100% of the company at valuations which were appropriate for a trade sale to a strategic buyer. This was Mekong Capital’s first divestment, but it opened the floodgates.
Since then, Mekong has completed 27 full exits, through a full range of exit routes: trade sales to strategic investors, sale to other PE funds, listing on the stock market and selling to other public equity funds, or in the worst cases, sales back to the founders.
We’ve found exiting to be particularly easy, especially for well-managed companies that have implemented most or all of Vision Driven Investing. The only obstacle we sometimes faced in the past was obtaining sufficient support from other key shareholders for our exit. Thankfully, Vietnam is large enough of an economy in SE Asia that it is on the radar screen for M&A or investment from regional strategic investors and PE funds. Meanwhile, it is easy for Vietnamese companies to list on Vietnam’s stock market, and the market has adequate participation by both retail investors and foreign public equity funds to make exiting via the stock market a viable option.
It is worth noting that while some PE funds have a short holding period averaging 3-5 years, Mekong aims to be a long-term investor and typically holds its investments for 5-10 years.
For a full list of our exited investments, please visit here.