Dragon Capital has announced a change to the fee structure of their flagship fund, Vietnam Enterprise Investments Limited.
The Board of Vietnam Enterprise Investments Limited ("VEIL") announced on 14 July 2017 a change to the management fee structure.
With effect from 1 August 2017, the annual management fee payable to the investment manager will be amended from the current 2.00% of total net asset value per annum to:
a) 00% per annum on the first US$1.25bn of the net assets.
b) 75% per annum on the portion of the net assets between US$1.25bn and US$1.5bn.
c) 50% per annum on the portion of the net assets above US$1.5bn.
The most recent unaudited net asset value of VEIL was USD1.23bn (2017).
The change in the fee structure follows a recently conducted review of industry trends in management fees, duly considering fee structures of peers. This change in the management fee follows on from the removal of the incentive fee when VEIL merged with Dragon Capital’s second largest fund, Vietnam Growth Fund, prior to VEIL listing on the main board of the London Stock Exchange in July 2016.
VEIL is Dragon Capital’s flagship fund and has come a long way in its 22 years; and recent developments including listing on the London Stock Exchange have cemented its position as the closed-end country fund of choice for international investors wanting access to Vietnam’s equity markets. Since listing in London, VEIL has outperformed the already robustly rising Vietnamese stock market, and its discount to NAV has narrowed from over 18% at the time of listing to around 11% currently.
With the underlying performance of VEIL and the narrowing of the discount, VEIL’s market capitalisation now exceeds USD 1.2bn, making it large enough for entry into the FTSE 250 Index, which we understand will take place effective 18 July 2017.