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Mekong Capital wins private equity award

Released at: 14:08, 03/10/2018

Mekong Capital wins private equity award

Photo: Traphaco

Firm receives 2018 Private Equity International Award based on performance of investee Traphaco.

by Doanh Doanh

Mekong Capital has received the 2018 Private Equity International (PEI) Award for Operational Excellence for a Lower Mid-Market/Small Cap investment in Asia-Pacific, based on the performance of Traphaco. This is the sixth year in a row Mekong Capital has won a PEI award.

It worked closely with Traphaco on projects covering areas such as establishing a clear vision and organizing around achieving the vision; optimizing working capital; aggressively expanding the nationwide distribution network; bonus systems; consolidation of subsidiaries by acquiring minority interests; and improving corporate governance; etc.

It is well-known for its Vision Driven Investing framework - the secret sauce for its series of consistently successful investments. Traphaco has applied certain elements of the framework and was one of the best performers in Mekong Capital’s Vietnam Azalea Fund.

As a result, during the ten-year lifecycle of Vietnam Azalea Fund’s investment in Traphaco, it developed from the fifth largest into the second largest pharmaceutical company in Vietnam. The company possesses one of the largest direct-to-pharmacy distribution networks in the country and is number one in traditional medicine. In 2017 it recorded $82.6 million in net revenue and $11.4 million in net profit.

In November 2017, the Vietnam Azalea Fund successfully divested its entire 24.99 per cent holding in Traphaco for $64.5 million, realizing a gross IRR of 27.7 per cent and a gross return multiple of 6.3 times.

Previously, Mekong Capital also won the Operational Improvement Firm of the Year for the Asian Small Cap category in 2013, 2015 and 2017, and Frontier Market Firm of the Year for 2014 and 2016.

Mekong Capital is a Vietnam-focused private equity firm specializing in consumer driven businesses and looking to invest in fast-growing companies with ambitious expansion plans and a commitment to building management teams that will successfully execute on those expansion plans.

Its funds have completed 33 private equity investments in Vietnam, of which 26 have been fully exited. Its latest investment vehicle, the Mekong Enterprise Fund III (MEF III), has to date announced investments in seven companies, including lending firm F88, logistics companies Nhat Tin and ABA, restaurant operator Red Wok, Ben Thanh Jewelry, Yola Education, and mattress retailer Vua Nem. All investee firms are implementing the Vision Driven Investing framework.

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