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Mekong Capital wins Private Equity International Award

Released at: 10:21, 04/10/2017

Mekong Capital wins Private Equity International Award

Photo: Mekong Capital

Company picks up award for investment in Mobile World.

by Doanh Doanh

Mekong Capital has been awarded the 2017 Private Equity International Award for Operational Excellence for a Small Cap Investment in Asia, based on the performance of Mobile World.

This is the fifth year in a row Mekong Capital has won a Private Equity International award, having won the Operational Improvement Firm of the Year for the Asian Small Cap category in 2013 and 2015 and Frontier Market Firm of the Year for 2014 and 2016.

Mekong Capital is known for its “Vision Driven Investing” formula – the secret sauce for its series of consistently successful investments. Mobile World has applied most of the framework and is one of the best performers among Mekong Capital’s investee companies.

The “Vision Driven Investing” framework seeks to align stakeholders with investee companies to achieve breakthrough goals. It was first introduced in 2009 and includes 14 components that are the key success drivers of its ability to add value to investee companies.

Mekong has supported Mobile World to implement the framework via different initiatives, from creating a vision, improving the management team, building a corporate culture, and involving outside experts. Mekong inspired Mobile World to create and launch its first vision in 2008 and then revised visions in 2011 and 2015. With a clear vision, Mobile World’s team aligned around common goals and successfully achieved their shared vision.

Since 2008, Mekong Capital recruited key senior managers and executives for Mobile World, who contributed tremendously to the success of the company. Many of them are still with the company and playing critical leadership roles.

Furthermore, Mekong encouraged and assisted Mobile World to build a strong corporate culture by inviting the retailer’s 35 top people to participate in a nine-month breakthrough leadership program as well as some follow-up programs. Once the new culture took root in the top several hundred people, it cascaded down to others in the company.

Mekong has also fostered connections between Mobile World and sector experts and international industry leaders, transformed the company’s incentive system, and supported its management in expanding into new business areas such as the consumer electronics and grocery sectors.

As a result, Mobile World has grown into the market leader in Vietnam’s mobile devices and consumer electronics sector while making a successful foray into the grocery sector. As at September, Mobile World operated 1,057 mobile phone stores around the country, securing a market share of more than 42 per cent. The company is also operating 535 electronics stores, with a share of 22 per cent, while its grocery chain has 190 stores. The company also operates a leading e-commerce website: https://www.vuivui.com/.

Since 2013, Mekong Capital has made 18 partial divestments from Mobile World, including the most recent one in September, in which it sold shares worth more than $18 million and realized a Gross IRR of 62.6 per cent and a gross return multiple of more than 133 times on the shares sold.

The Vision Driven Investing framework has proven itself a secret sauce of Mekong’s successful investments over time, after effectively adding value to other investee firms that applied the initiative.

Mekong Capital is a Vietnam-focused private equity firm specializing in consumer-driven businesses. Its funds have completed 32 private equity investments in Vietnam, of which 22 have been fully exited and one has been partially exited. 

It manages four funds, with a team of 25 full-time people in offices in Ho Chi Minh City and Hanoi. The funds invest in fast-growing companies with ambitious expansion plans and a commitment to building management teams that will successfully execute on those expansion plans. These companies are typically well-established companies in consumer-driven sectors that operate in fragmented and fast-growing markets that provide attractive growth opportunities.

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