Vipc capital management company brochure 2010

2010

VIPC BROCHURE

VIPC Viet Investment Power

2

TABLE OF CONTENTS

PART 1:VIETNAM – EMERGING FOR OPPORTUNITIES ...................................................... 6

I. Vietnam – Land for Opportunities............................................................................................... 7

1. Vietnam at a glance ................................................................................................................. 7

1.1 Geography ......................................................................................................................... 7

1.2 Society............................................................................................................................... 7

1.3 Infrastructure ..................................................................................................................... 7

1.4 Economy ........................................................................................................................... 7

2. Why do invest in Vietnam ...................................................................................................... 8

II. Foreign Direct Investment in Vietnam ....................................................................................... 9

1. FDI inflows to Vietnam (1988- May 2010) ............................................................................ 9

2. FDI distribution by sector (1988-2007) ................................................................................ 10

3. Top ten countries investing to Vietnam ................................................................................ 11

III. Post – WTO Investment climate & Legal framework ............................................................ 12

1. Vietnam’s commitments to WTO ......................................................................................... 12

1.1 Schedule of concessions & commitments on goods: ...................................................... 12

1.2 Schedule of specific commitments on trade in services ................................................. 12

2. Investment-related obligations .............................................................................................. 12

3. Investment Opportunities entitled to Incentives ................................................................... 13

3.1 Preferential sectors: ....................................................................................................... 13

3.2 Regions entitled to Incentives: ........................................................................................ 13


3

4. Incentives on Corporate Income Tax .................................................................................... 13

5. Import Duty Exemption & Reduction................................................................................... 14

6. Forms of Investment ............................................................................................................. 14

7. Licensing & Registration Procedure ..................................................................................... 15

8. Investment Licensing Bodies ................................................................................................ 15

IV. Investment- related cost .......................................................................................................... 16

1. Monthly-wage (Source: JETRO survey, May 2009) ............................................................ 16

2. Land price, office rent (Source: JETRO survey, May 2009) ................................................ 16

3. Public Utility & Transportation expenses ............................................................................. 17

(Source: JETRO survey, May 2009) ......................................................................................... 17

4. Taxation (Source: JETRO survey, May 2009) ..................................................................... 18

PART 2: FOREIGN INVESTMENT IN VIETNAM ................................................................... 19

(Indirect investment in stock market) ........................................................................................... 19

Foreign investment in Vietnam's securities market ...................................................................... 19

I.Foreign investment in Vietnam's securities market .................................................................... 20

1. WHO are foreign investors? ................................................................................................. 20

2. What must a foreign investor do? ......................................................................................... 20

3. What must a foreign investor not do? ................................................................................... 21

4. Making the investment ......................................................................................................... 21

5. Appointment of a transaction representative ........................................................................ 22

6. Engaging a local fund manager ............................................................................................. 22


4

7. Reporting............................................................................................................................... 22

8. What's missing? .................................................................................................................... 22

8.1 Personal income tax ( for individual) .............................................................................. 22

8.2 Enterprise income tax (FOR institute) ............................................................................ 23

8.3 Capital investment tax (FOR investor) ........................................................................... 23

II.Investment entrustment process ................................................................................................ 23

III. Fee ........................................................................................................................................... 24

1. Fee for investment portfolio (VIPC): ................................................................................. 24

2. Broker fee (Securities company): ...................................................................................... 24

3. Custodian fee and asset keeping (custodian bank): ........................................................... 24

IV. Tax (MENTION above) ......................................................................................................... 25

1. Individuals (one of the following case) ............................................................................. 25

2. Enterprise income tax (Mention above) ............................................................................. 25

2.1 Institutes .......................................................................................................................... 25

2.2 Capital investment tax..................................................................................................... 25

PART 3:VIPC CAPITAL MANAGEMENT CORPORATION .................................................. 26

I. Our Firm .................................................................................................................................... 27

II.VIPC Products & Services ........................................................................................................ 29

1. VIPC Product family............................................................................................................. 29

2. Real Estate Fund (REF) ........................................................................................................ 29

2.1 Investment Objective ...................................................................................................... 29


5

2.2 Investment Strategy ........................................................................................................ 30

2.3 Investment process .......................................................................................................... 30

2.4 Why Vietnam? ................................................................................................................ 31

2.5 Key Facts ........................................................................................................................ 32

2.6 VIPC Real estate Fund structure ..................................................................................... 34

2.7 What are the benefits VIPC’s REF bring to investors? .................................................. 35

3. Portfolio management services ............................................................................................. 36

3.1 VIPC Portfolio Management Service (PMS) OFFERS: ................................................. 36

3.2 Investment methodology:................................................................................................ 36

3.3 PMS Term ....................................................................................................................... 37

3.4 VIPC 6 PMS Models ...................................................................................................... 38

3.5 Portfolio asset allocation and performance in 2009 ........................................................ 41

4. Advisory services .................................................................................................................. 47

4.1 About Our Team: ............................................................................................................ 47

4.2 Advantages to deal with us ............................................................................................. 47


6

PART 1:

VIETNAM – EMERGING FOR

OPPORTUNITIES


7

I. VIETNAM – LAND FOR OPPORTUNITIES

1. VIETNAM AT A GLANCE

1.1 GEOGRAPHY

Population (2009): 85.79 millions

Centre of Southeast Asia

Area: 331,698 sq. km

Coastline: 3,260 km

1.2 SOCIETY

Growth rate (2007): 1.2%

Under 30 yrs old: >60%

Literacy rate: >90%

1.3 INFRASTRUCTURE

National highways: 86,327 km

Railways: 3,219 km

International Airports: Hanoi, Da Nang & Ho

Chi Minh City

International Seaports: 11 (Cai Lan, Da Nang, Van Phong, etc.)

150 IPs with area of 31,436 ha

8 EZs with area of 323,940 ha

1.4 ECONOMY

Real GDP: 94.68 billion US$

Real GDP growth rate (2009): 5.2%, year 2010e: 8.5%

Real GDP per capita (2009): US$ 1052,year 2010e: 1200 US$

Export Turnover (May 2010): US$ 6.1 billion


8

0

1

2

3

4

5

6

7

8

9

10

5.81

8.7

8.08

8.83

9.54 9.34

8.15

5.76

4.77

6.75 6.84 7.01 7.17.7

8.4 8.28.48

6.32

5.2

8.28

Vietnam GDP Growth rate (%)Source: FIA , GoldmanSachs forecast

2. WHY DO INVEST IN VIETNAM

Political and socio-economic stability

Brisk and steady economic growth

Transportation hub of Southeast Asia

Abundant young labor force at low price

Member of WTO, APEC, ASEAN, ASEM

Favorable FDI promotion policies

Rapidly improving infrastructure


9

0

10000

20000

30000

40000

50000

60000

70000

19

88

-19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

5 m

on

ths

20

10

10,200

21,300

64,000

21,480

5,9208,030

11,500 10,000

3,600

Investment inflows

Disbursed

US$ mil.

II. FOREIGN DIRECT INVESTMENT IN VIETNAM

1. FDI INFLOWS TO VIETNAM (1988- MAY 2010)


10

2. FDI DISTRIBUTION BY SECTOR (1988-2007)

4.59%

15.93%

28.73%

4.28%

6.90%

4.71%

0.53%

2.53%5.08%

7.21%

1.08%

1.47%4.09%

11.07%

1.78%

FDI distribution by sector( 1988-2007)Oil & gas industry

Light industry

Heavy industry

Food

Building

Agro-forestry

Marine industry

Services

Transportation-Post

Hotel-Tourism

Banking-Finance

Culture- Medical-Education

New urban infrastructure

Office-Apartment building

IPs-Ezs infrastructure

Light industry

Source: FIA

Heavy industry

FoodBuilding

Agro-Forestry

Oil & gas industry

IPs-EZs infrastructure

Office-Apartment

New urban

Hotel-Tourism

Transportation-Post

Marine industry

Services


11

3. TOP TEN COUNTRIES INVESTING TO VIETNAM

No. Countries Number of

projects

Investment capital Legal capital Disbursed capital

1. Korea 1857 14,398,138,655 5,168,461,054 2,738,114,393

2. Singapore 549 11,058,802,313 3,894,467,177 3,858,078,376

3. Taiwan 1801 10,763,147,783 4,598,733,632 3,079,209,610

4. Japan 934 9,179,715,704 3,963,292,649 4,987,063,346

5. British Virgin

Islands 342 7,794,876,348 2,612,088,725 1,375,722,679

6. Hong Kong 457 5,933,188,334 2,166,936,512 2,161,176,270

7. Malaysia 245 2,823,171,518 1,797,165,234 1,083,158,348

8. USA 376 2,788,623,488 1,449,742,606 746,009,069

9. Holland 86 2,598,537,747 1,482,216,843 2,031,314,551

10. France 196 2,376,366,335 1,441,010,694 1,085,203,846


12

III. POST – WTO INVESTMENT CLIMATE & LEGAL FRAMEWORK

1. VIETNAM’S COMMITMENTS TO WTO

1.1 SCHEDULE OF CONCESSIONS & COMMITMENTS ON GOODS:

Bound rates for 10,600 tariff lines

An average cut from 17.4% to 13.4% phased over 5-7 years since 2007

Largest reduction applied to garments & textiles, fish& fish products, wood & paper,

other manufactured goods, machinery, electrical & electronic items

Committed to be member (fully or partially) to initiatives for IT products, garments &

textiles, medical equipment, aircraft, chemicals, construction, equipment etc. Tariffs cut

phased over 3-5 years since 2007

1.2 SCHEDULE OF SPECIFIC COMMITMENTS ON TRADE IN SERVICES

Open door in 11 out of 12 service sectors (or 110 out of 115 sub-sectors), including:

business services, communication, construction & related engineering, distribution,

health, insurance, education, tourism, environment, finance, entertainment,

transportation, etc.

Commitments put in force right after WTO accession. In some cases, they’re phased over

2-4-6 years since 2007

2. INVESTMENT-RELATED OBLIGATIONS

TRIMS (effective from 11 Jan 2007): Eliminate the application of requirements on trade

balance, foreign exchange control on imports, export performance, export restrictions and

local contents

Intellectual Property Rights: Comply with TRIPS Agreement upon accession

Transparency: Make public draft WTO-related legal instruments for public comments;

Make public all legal documents; Provide WTO members with annual reports on

equalization program


13

3. INVESTMENT OPPORTUNITIES ENTITLED TO INCENTIVES

3.1 PREFERENTIAL SECTORS:

Manufacture of new material & production of new energy, manufacture of high-tech

products, bio-technology, information technology & mechanical manufacturing;

Breeding, rearing, growing & processing of agricultural, forestry & aquaculture products,

production of salt, creation of new plant & animal varieties;

Utilization of high technology & advanced techniques, protection of the ecological

environment & research, development & creation of high technology

Labor intensive industries;

Construction &development of infrastructure facilities & important industrial large-scale

projects;

Professional development of education, training, health, sports, physical education &

Vietnamese culture;

Development of traditional crafts & industries; and

Other manufacturing & service sectors which require encouragement

3.2 REGIONS ENTITLED TO INCENTIVES:

Regions with special difficult socio-economic conditions;

Regions with difficult socio-economic conditions; and

Industrial zones, Export processing zones, High-tech zones & Economic zones

4. INCENTIVES ON CORPORATE INCOME TAX

Standard rate: 28%

Preferential rates of 10%, 15% and 20% for a period of 15 years, 12 years and 10 years

are available depending on the scope of activities and location of the investment.

Tax holidays: A complete exemption from CIT for a certain period (4 yrs at maximum)

followed by a period where tax is charged at half rate (9 yrs at maximum)


14

Losses: Carry forward losses for 5 years

Other incentives: Exemption or deduction of land use tax, land use fee, land rent, and

water surface rent

5. IMPORT DUTY EXEMPTION & REDUCTION

Exemption applied to projects in investment encouraged sectors & regions on:

Machinery & equipment, specialized means of transportation & construction materials(

which cannot be produced in Vietnam) comprising the fixed assets of certain projects

Raw materials, spare parts, accessories, other supplies, samples, machinery & equipment

imported for the processing of goods for export and finished products imported to stock

to the processed goods

Preferential rates applied to imported goods from countries that enjoy MFN with Vietnam (89

countries). Rates vary by the category of goods.

Special preferential rates applied to imported goods from countries that signed special

agreement with Vietnam (e.g. ASEAN)

Ordinary rates are 150% of preferential rates

6. FORMS OF INVESTMENT

100% foreign-owned enterprise

o Limited liability Company

o Joint stock company

o Partnership

o Holding company

Joint venture

Business cooperation contract

BOT, BTO, BT

Capital contribution, purchase of shareholding,

M&A


15

7. LICENSING & REGISTRATION PROCEDURE

8. INVESTMENT LICENSING BODIES


16

IV. INVESTMENT- RELATED COST

1. MONTHLY-WAGE (SOURCE: JETRO SURVEY, MAY 2009)

Monthly

wage(US$) Ha Noi HCMC Shanghai Hong Kong Singapore

Worker 96 96 249 1294 1027

Engineer 270 270 610 2092 1892

Manager 798 798 966 3237 3139

Legal minimum

wage(monthly) 70.7 70.7 140.4 Nil _

2. LAND PRICE, OFFICE RENT (SOURCE: JETRO SURVEY, MAY 2009)

Land price, office

rent ($) Ha Noi HCMC Shanghai Hong Kong Singapore

Industrial land

( yearly, per sq.m)

0.119-

0.142 (IPs) 0.22 1.8-3.1 309.43 0.52-1.47

Office rent ( monthly,

per sq.m) 27.5-73.2 82.5 64.7 28-132 36-65

Housing rent for Hanoi 2550 2,047- 1,805-3,868 2,672-4,342


17

foreigners(per

month)

tower:

3600

4,386

International call

charge

( for 3 min. to Japan)

0.636 0.636 2.1-3.5 0.38-1.08 0.7-1.8

Mobile phone

subscription fee 7.06 7.06 7.3

-

29

Internet connection

fee( per month) 194.44 194.44 365.5 33 240.5

3. PUBLIC UTILITY & TRANSPORTATION EXPENSES

(SOURCE: JETRO SURVEY, MAY 2009)

Public Utility

Expenses -

Transportation fee

($)

Ha Noi HCMC Shanghai Hong Kong Singapore

Electricity rate for

business use

( per KWh)

0.028-

0.103 0.028-0.103 0.09 0.12 0.147

Water rate for

business use ( per

cu.m)

0.292 0.59-1.4 0.22 4.6-11 1.39


18

Gas rate for

business use ( per

cu.m)

Rate per

kg: 0.9

Rate per kg:

0.9 0.25-0.28

rate per MJ:

0.026 0.135

Regular gasoline

price (1 liter) 0.65 0.65 0.74 1.62 1.061-1.066

Diesel oil price( 1

liter) 0.65 0.65 0.71 1.06 0.830

4. TAXATION (SOURCE: JETRO SURVEY, MAY 2009)

Taxation Hanoi HCMC Shanghai Hong Kong Singapore

Corporate income tax 28% 28% 25% 16.5% 18%

Personal income tax rate 40% 40% 45% 15% 20%

VAT 0%, 5%,

10%

0%, 5%,

10% 17% Nil 7%

Tax on interest remitted to

Japan 10% 10% 10% Nil 10%

Tax on dividend remitted to

Japan 0% 0% 10% Nil Nil


19

PART 2: FOREIGN INVESTMENT IN

VIETNAM

(INDIRECT INVESTMENT IN STOCK MARKET)

FOREIGN INVESTMENT IN VIETNAM'S

SECURITIES MARKET


20

I.FOREIGN INVESTMENT IN VIETNAM'S SECURITIES MARKET

CONTENTS

1. Who are foreign investors?

2. What must a foreign investor do?

3. What must a foreign investor not do?

4. Making the investment

5. Appointment of a transaction representative

6. Engaging a local fund manager

7. Reporting

8. What's missing? (Fee, Tax)

1. WHO ARE FOREIGN INVESTORS?

Foreign citizens, including Viet Kieu (ie. overseas Vietnamese);

Entities established offshore

o Branch offices in Vietnam

o 100 per cent foreign-owned enterprises incorporated in Vietnam

o Offshore investment funds

o Vietnam domiciled investment funds with 100 per cent foreign ownership.

2. WHAT MUST A FOREIGN INVESTOR DO?

Foreign investors who invest in listed and unlisted securities or participate in securities auctions

in Vietnam must:


21

Obtain and register a securities trading code (the Code) with the VSD – a foreign investor

may have only one Code; and

Open an indirect investment capital account at any bank that is authorized to provide

custody and foreign exchange services.

If a foreign investor chooses to invest using a local fund manager then that fund manager will

apply and register the Code for the investor.

3. WHAT MUST A FOREIGN INVESTOR NOT DO?

A foreign investor's Code may be suspended or terminated if the investor:

Provides inaccurate or deceptive information in relation to the application for the Code or

other information as required by the SSC;

Engages in illegal practices such as collusion, market manipulation or money laundering;

or

Breaches foreign exchange regulations

4. MAKING THE INVESTMENT

Three ways for a foreign investor to make securities investment in Vietnam:

• The foreign investor directly carries out the transaction by instructing a securities

company to place the order;

• The foreign investor appoints a transaction representative to place the order for the

foreign investor; or

• The foreign investor engages a local fund manager to manage the foreign investor's

securities investment.


22

5. APPOINTMENT OF A TRANSACTION REPRESENTATIVE

A foreign investor may appoint only one individual in Vietnam under a power of attorney

The attorney must hold a securities business practicing certificate issued by the SSC;

The attorney must not be an employee of any local securities company, fund

management company or custodian bank;

6. ENGAGING A LOCAL FUND MANAGER

A local fund manager under an investment management agreement to carry out portfolio

and asset management and make investment decisions for the foreign investor (including

decisions in relation to the type of securities, volume, price and trading date)

A foreign investor may not engage any other individual or entity to carry out such

management activities for the investor.

Vietnam representative offices of offshore funds which are currently carrying out these

functions are doing so illegally.

7. REPORTING

Securities companies, fund managers and transaction representatives are required to report

periodically to the SSC on the securities transactions of the foreign investor using a standard

form.

8. WHAT'S MISSING?

8.1 PERSONAL INCOME TAX ( FOR INDIVIDUAL)

• 20 per cent of the net gain or

• 0.1 per cent of the value of the securities transfer


23

8.2 ENTERPRISE INCOME TAX (FOR INSTITUTE)

• 0.1 per cent of the value of the securities transfer

8.3 CAPITAL INVESTMENT TAX (FOR INVESTOR)

• 5 per cent of the net gain

II.INVESTMENT ENTRUSTMENT PROCESS


24

III. FEE

1. FEE FOR INVESTMENT PORTFOLIO (VIPC):

2. BROKER FEE (SECURITIES COMPANY):

3. CUSTODIAN FEE AND ASSET KEEPING (CUSTODIAN BANK):

2% annual NAV

Fee of asset management

0,1% Transaction

valueBroker

fee

0,01%Total value

of a transaction

Fee on transaction

1/12 x 0,06%

NAVCustodian

fee


25

IV. TAX (MENTION ABOVE)

1. INDIVIDUALS (ONE OF THE FOLLOWING CASE)

2. ENTERPRISE INCOME TAX (MENTION ABOVE)

2.1 INSTITUTES

2.2 CAPITAL INVESTMENT TAX

Net gain

20%

Personal income

tax

the value of the

securities transfer

0,1%

Personal income

tax

the value of the

securities transfer 0,1%

Enterprise income tax

Net gain 5%Capital investment tax


26

PART 3:

VIPC CAPITAL MANAGEMENT

CORPORATION

INVESTMENT HUB TO VIETNAM


27

I. OUR FIRM

VIPC Capital Management or well known as VIPC Fund Management is an independent

national licensed investment fund upon teamwork management and trustworthy pass

relationships with investors.

The legal entity shareholder of VIPC is Viet Vinh Phu Company, a highly reputation domestic

and international financial investment organization. Together with Viet Vinh Phu Company,

VIPC is established by individual investors who have comprehensive education and extensive

experience in the world and Vietnamese financial and stock market. Standing on a strong

foundation, VIPC’s shareholders now has the largest shares in Saigon Commercial Bank, major

shares in Great Truong Son project and Khanh Hoi Sugar Joint Stock Company

VIPC offers independent and institutional investors variety range of investment capacities to

match with hundreds of professional value contacts and investment opportunities in one of the

most attractive emerging markets, Vietnam in Real estate, Securities and Private Equity.

Name

VIPC CAPITAL MANAGEMENT CORPORATION

Establishment

January 23, 2009

VAT Number

0306790482

Business Scope Fund management and investment portfolio management (Asset

management)

Regulated Body

State Securities Commission of Vietnam (SSC)

Address

No. 8, Nguyen Hue St. Dist 1, HCMC. Vietnam

Tel

(+84-8) 38277078 (+84-8) 38277079

Fax (+84-8) 38277487


28

URL

www.vipc.com.vn

Chartered Capital

33.000.000.000 VND

Major Share Holders

1. VIET VINH PHU INVESTMENT FINANCE CO., LTD

2. PARAGON CORP. (http://www.saigonparagon.com)

3. Mr. Nguyen Xuan Tung

4. Mr. Doan Duc Vinh

Ms. Vu Thi Toan

Legal Consultant

Vilaf Hong Duc

Representative Director

Mr. Nguyen Xuan Tung

Board of Directors

Mr. Nguyen Xuan Tung Chairman

Mr. Nguyen Ho Nam Board Member

Mr. Doan Duc Vinh Board Member

Mr. Hoang Duc Hoa Board Member

Ms. Vu Thi Toan Board Member

Legal Consultant

Vilaf Hong Duc

Auditor

AASCS

Custodian Bank

BIDV

Bank Account Number

BIDB000016

Asset under management

VND ( Vietnamdong)

http://www.vipc.com.vn/

http://www.saigonparagon.com/


29

II.VIPC PRODUCTS & SERVICES

1. VIPC PRODUCT FAMILY

2. REAL ESTATE FUND (REF)

2.1 INVESTMENT OBJECTIVE

Primarily Investment objective of VIPC Real Estate fund is by investing attractive projects at the

early stages in Vietnam.

The Fund will leverage its strong connected local networks and experience in property

development and redevelopment of upscale residential, commercial and private projects to

maximize an attractive overall return through diversified property portfolio.


30

2.2 INVESTMENT STRATEGY

To achieve a balanced risk-reward profile, the fund will be invested in three broad classes of

companies:

a. Projects, which are completed - this would comprise real estate assets, which are in use

with established, high-quality tenants. Such asset class would typically denote steady

income type characteristics.

b. Projects in development stage - where the lead-time to commercial deployment is

typically between one-three years, and the completed projects subsequently would have

contractual off-take arrangements in place.

c. Projects in the planning stage - where the lead-time to commercial deployment would

be three-six years. These projects would offer the highest amount of return, although with

a greater risk.

2.3 INVESTMENT PROCESS

Stage 1

• Best locations/lands for

investment activities nomination

(Industry Screening)

• Site visit initial evaluation for

nominated projects (Site

Inspections)

• Geological studies for project

locations ( Evaluation)

Stage 2

Drafting of feasibility studies

• Information of legal studies with


31

regards to real estate activities

• Maintenance and management plan examination.

• Real estate valuation (appraisal) services

• Due diligence

Stage 3

• Industrial real estate services

• Real estate management (market price, market rent, rent collection and follow-up)

• Real estate applications and process clearance

• Loan collateral and loan transitions services

• Loan implementation services

• Mortgage services

• Real estate segmentation services (apartments and condominiums)

• Other real estate related services

2.4 WHY VIETNAM?

Vietnam’s economy and real estate

sector in particular are high on its ride to

prosperity. As Vietnam’s economic

growth curve rises, real estate have

emerged as one of the most appealing

investment areas for domestic as well as

foreign investors.

Maximum growth is attributed to its

growth from the booming young

populations, since an estimated 60 per

cent of the new construction is for the

newlywed’s family.


32

Investment scenario has certainly undergone a paradigm shift in Vietnam, rental return

from new residential apartment’s ranges from 8 to 10.5%, and that from commercial

property in Vietnam metros is around 12-14%, one of the highest in the world.

According to the Emerging Trends in Real Estate® Asia Pacific 2010 Report published

by PricewaterhouseCoopers LLP (PwC), Vietnam is ranked 3rd

in the regional list of

countries that are least impacted by global economic crisis in 2009 and 2010. Thus,

Vietnam real estate market is a promising destination for stability-expected investment

flows

The report also states that Ho Chi Minh City of Vietnam is ranked 3rd for development

prospects in 2010 and highly graded in segment ranking. Besides, the city is projected to

achieve the world highest average real growth rate of GDP in the period 2008-2025,

reaching 7% per annum

Also marked in the report, HCMC average yields in grade A office, retail, residential and

industrial segments in 2009 range from 11.5% to 14%- an outstanding outcome

comparing to other Asia Pacific players. Hotel and retail hold the 2nd place while

segments of industry; office and residential housing are respectively ranked as 4th, 6th

and 7th in the list.

2.5 KEY FACTS

Selling and buying Vietnam property is now considered as the most profitable and

attractive business opportunity in the present real estate scenario in ASEAN. User

demands have added to strength of real estate markets across the commercial, residential

and retail sectors in Vietnam, especially commercial property with exceeded supply for

the past few years.

There has also been an upward swing on the real estate price values in the recent years.

Due to the huge demand and rising prices, investment and speculative interest in real

estate is growing while excess money supply, inflation and regular depreciation of VND

to US$ are adding to the trend in favor of the real estate sector.


33

In the last 2 years, the capital values of the commercial office spaces has increased by up

to 25% owing to the increase in the demand from global business reallocation and

domestic professional business sectors across major metros in Vietnam.

- Factors Favoring Real Estate’s Investment, easy availability of housing finance,

burgeoning income and better job prospects, increase of nuclear families have

given a boost to the demand in Vietnam. The net yields (after accounting for all

outgoings) on residential property are currently at 8-10.5 % p.a. However, these

investments have benefited from the improving residential capital values. As

such, investors can count on potential capital gains to improve their overall

returns. Capital values in the residential sector have risen by about 40-200% p.a in

the last 5 years.

The residential market in Vietnam has been growing due to increasing demand from

retailers; higher disposable incomes. The capital appreciation in this sector is close to 20-

35% p.a. However, the risks associated with this sector are higher as retailers are prone to

cyclical changes typical of a business cycle. Changing consumer behavior combined with

increasing disposable incomes will ensure further growth of the retail sector in Vietnam

In the present day scenario, if there is any powerful investment tool that brings

burgeoning financial returns, it is VIETNAM REAL ESTATE!!! Investors should

consider the parameters minutely and meticulously to find out why investing in Vietnam

real estate now is the best viable option.


34

2.6 VIPC REAL ESTATE FUND STRUCTURE

Investment manager VIPC Capital

Investment advisor Dr. Markus Freiburghaus

Minimum investment 200 million USD

Term Vote every 5 years to wind up fund

Initial unit price 5 USD

Distribution At the end of investment

Number of calls 100% investment up – front

Withdrawal Not permitted during term (subject to charter

fund)

Auditor Ernst and Young / KPMG or Grant Thornson

Custodian BIDV / Deutsche Bank

Lawyer Vilaf Hong Duc

Management fee 2%

Investment manager VIPC Capital


35

Performance Fee

Incentive fee of 20% of total increase of the

NAV over a hurdle rate of 15 % annual

returns with higher watermark and catch up.

Fee & Tax See principal information section

(www.vipc.com.vn )

2.7 WHAT ARE THE BENEFITS VIPC’S REF BRING TO INVESTORS?

Liquidity: When an investor invests directly in an individual property, buying and selling proves

a complex, time-consuming process. By contrast, an investment in VIPC Real Estate Fund will

be more readily converted into cash as these units will be traded on the stock exchange when

funds fully allocated.

Affordability: Real estate has traditionally been a sound investment option but remains limited

to only a few as the amount of money required for investing in real estate directly is very high.

VIPC REF will allow common investors to reap benefits of investment in real estate without

putting in significant amounts.

Professional management: Real estate investment in Vietnam is fraught with risks related to

documentation, title of property, legal aspects and so on which would be mitigated in this

scenario.

REF would also provide new investment avenues to pension funds, endowment funds, insurance

companies, thereby bringing the institutional investor into the ambit of the real estate market.

This will further boost professionalism in the real estate sector.

VIPC REF structure is an ideal instrument for propelling investments into real estate. It

combines the best features of the real estate industry with other financial instruments, and gives

http://www.vipc.com.vn/


36

the investor a practical and efficient means for including professionally managed real estate in

his investment portfolio.

3. PORTFOLIO MANAGEMENT SERVICES

3.1 VIPC PORTFOLIO MANAGEMENT SERVICE (PMS) OFFERS:

Appointed Trust Agreement- we will follow your instruction and place your orders, we only act

as an executor and clear your trades.

Non Appointed Trust Agreement- a Managed Discretionary Account service and you hold your

stock trading account with us, we will on be half of you to make investment decisions and clear

all the trades for you.

VIPC has 5 qualified investment managers to manage client assets in our PMS, on the basis of

their expertise in managing fund portfolios. Based on a completed Investor Profile

Questionnaire, investment manager of VIPC will review of individual financial situation,

investment objectives, risk tolerance levels, planned investment time horizon, and recommend a

long-term target portfolio strategy.

We have six well-performed long term Portfolio Models being tested and fits to different risk

appetites of investors. All our services are designed to help you to invest your money in a

professionally managed portfolio using asset allocation principles.

3.2 INVESTMENT METHODOLOGY:

When we identify a specific sector to target for investment, deeply research the space and

identify actionable investment opportunities. Combines “top down-sectors” (evaluating and

selecting sectors based on carefully considered investment theses) and “bottom up-individual

stock” assigning a team of investment professionals to get to know, at a Granular Level.

It is a targeted, proactive, repeatable process that we apply to more than 5 sectors of stocks and

that is core value of our investment approach. This targeted process sometimes can take many

years to identify the new stocks, but we believe that it enables us to produce high quality,

proprietary investment opportunities in sectors where we face limited competition. As a result of


37

this process, more than two-thirds of the Discretionary Managed Account (DMA) and Portfolio

Management Service (PMS) made by the VIPC since our establishment in 2009 have been

internally generated.

3.3 PMS TERM

Product PMS

Term 1 - 5 years

Minimum Investment US$100,000.00

Currency USD, AUD, EURO, SGD and JPY


38

Investment Objective To generate a stable return on an annual basic with

strong emphasis on capital preservation

Trading Fee 0.1% on each transaction

Management Fee 2%/year

Early Redemption Fee Negotiable

Report Monthly/Quarterly

Withdraw notice 1 month before

3.4 VIPC 6 PMS MODELS

Name of

PMS

Objectives Styles, risk and return Strategy, asset classes

and allocation

VIPC

Aggressive

Growth

HOSE &

HASTC

stocks

VIPC 1 aims to

provide superior

returns (before

fees and taxes)

over the long

term through

capital growth, by

investing in

growth stocks.

VND denominated, selected

specific sectors by morning

star with rigorous research to

target for high growth

opportunities.

Risk: High

Depends on economic

cycles, OTC & Listed

stocks in Vietnam stock

trading market ( 95 %

allocation)


39

VIPC

Growth

Mainly consist of

companies with

above-average

growth in

earnings that rein

vest their

earnings into

expansion,

acquisitions, or

research and

development.

VND denominated, selected

great potential of capital

earnings stocks and invest to

asset classes with stable

profit, while reserve some

cash in fixed income.

Risk: Medium-High

OTC and listed stocks in

Vietnam stock trading

market 65% high growth,

30% High Dividend

stocks, 5 % Cash.

VIPC

Balance

Well balanced

stable income and

capital growth in

medium and

long-term

VND denominated, invest in

large cap with steady growth

and asset classes with an

fixed income.

Risk: Medium

OTC & Listed stocks in

Vietnam stock trading

market ( 40 % high

growth , 30 % large cap

)Vietnam Commercial

Bank Instruments (25%).

Cash 5%

VIPC

Conservative

Balance

Income from

dividends of big

cap low volatility

with some

exposure to

growth in

medium and

long-term.

VND denominated, securities

instrument qualified with

great potential of higher

return. While invests in large

cap with positive earnings

outlook.

Risk: Medium-Low

40% in Large & Mid Cap

with positive earnings &

high dividend outlook ,

20% High growth, while

35-40% in high income

bank instruments.

VIPC

Vietnam

VIPC 5 invests

mostly in the

defensive assets

VND denominated, steady

incomes from different

banking instruments with

50% Banking instruments

with superior returns

including corporate bonds


40

High Income of cash and fixed

income, with

some exposure to

growth assets.

return warranted.

Risk: Low

and debentures or bills,

35% in large cap with

steady dividends, 10%

high growth, 5% in cash.

VIPC

Preservation

Capital

conservation and

well protected

from Inflation

VND or USD denominated,

including money market

instruments, benchmarking to

local inflation rate as a target

return.

Risk: Very Low

An investment mixes

allocation 85% of highly

liquidated cash assets,

such as VND, or USD. 10

% in large cap, 5% in high

growth.


41

3.5 PORTFOLIO ASSET ALLOCATION AND PERFORMANCE IN 2009

6.80%

10.20%

8.50%

29.80%4.30%

8.50%

10.20%

6.80%5%

VIPC Aggressive Growth Fund

Real estate & Construction

Information technology

Banking

Securities

Consumer services

Construction materials & steel

Plastic,rubber&fiber

Coal& mineral minesCash

0.00%

25.00%

50.00%

75.00%

100.00%

125.00%

150.00%

6 months 12 months

126.40%99.70%

96.90%

70.30%

29.60% 29.30%

Fund return

Hurdle rate

Comparative return


42

5.20% 7.80%

6.50%

22.80%

3.30%6.50%7.80%

5.20%

8.70%

7.20%

5.70%

3.90%4.50% 5.00%

VIPC Growth Fund

Real estate &Construction


Banking

Securities

Consumer servicesConstruction

materials & steel

Plastic,rubber& fiber

Coal& mineral mines

Cash

Petroleum exploration, drilling & refining

Pharmaceuticals

Foods

Beers and Aquacultures

Petroleum distribution

0.00%

25.00%

50.00%

75.00%

100.00%

125.00%

150.00%

6 months 12 months

121.80%97.40%

96.90%

70.30%

24.90% 27.00%

Fund return

Hurdle rate

Comparative return


43

3.20% 4.80%4.00%

14.00%

2.00%4.00%

4.80%

3.20%8.70%

7.20%5.70%

3.90%

4.50%

25.00%

5%

VIPC Balance Fund


Information technology Banking

Securities

Consumer services


Plastic,rubber&fiber

Coal& mineral mines

Cash


PharmaceuticalsFoods

Beers & Aquacultures


Fixed income

0.00%

25.00%

50.00%

75.00%

100.00%

6 months 12 months

89.20%73.50%

73.90%

62.80%

16.20% 18.70%

Fund return

Hurdle rate

Comparative return


44

1.60% 2.40%

2.00%

7.00% 1.00%2.00%

2.40%1.60%

11.60%

9.60%

7.60%5.20%

6.00%

35.00%

5%

VIPC Conservative Balance Fund



Banking

Securities

Consumer servicesConstruction materials &

steelPlastic,rubber&fiber Coal&

mineral mines

Cash


Pharmaceuticals

FoodsBeers & Aquacultures


Fixed income

0.00%

25.00%

50.00%

75.00%

6 months 12 months

73.90%62.80%

63.40%

48.70%

10.40%14.20%

Fund return

Hurdle rate

Comparative return


45

0.80%1.20% 1%

3.50%

0.50%

1%

1.20%

0.80%

10.20%

8.40%

6.70%

4.60%

5.30%

50%

5%

VIPC High Income Fund Information technology

Banking

Securities


Consumer services


Plastic,rubber and fibre

Coal and mineral mines

Petroleum exploration, drilling and refiningPharmaceuticals

Foods



Fixed income

Cash

0.00%

20.00%

40.00%

60.00%

6 months 12 months

55.50% 49.10%

49.10%

39.40%

6.40%9.70%

Fund return

Hurdle rate

Comparative return


46

0.40% 0.60%

0.50%

1.80%

0.30%

0.50%

0.60%

0.40%

2.90%2.40%

1.90%

1.30%

1.50%

85%

VIPC Preservation FundInformation technology

Banking

Securities


Consumer services


Plastic,rubber and fibre

Coal and mineral mines

Petroleum exploration, drilling and refiningPharmaceuticals

Foods



Fixed income

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

6 months 12 months

22.40%

23.70%

20.40% 20.80%

1.90%2.90%

Fund return

Hurdle rate

Comparative return


47

4. ADVISORY SERVICES

4.1 ABOUT OUR TEAM:

Our team of seasoned analysts is a powerful tool that can provide you clarity, helping you

understand how to best achieve your overall investing goals.

Assured that your plan goals and objectives coupled with our risk management can lead

to improved performance.

Certain about having another fiduciary point of view when developing or evolving your

investment policies.

Confident about your decisions by using our due diligence and evaluations of both public

and private investment opportunities.

4.2 ADVANTAGES TO DEAL WITH US

Greater independence

Our firm is staffed by independent consultants who select products that fit your specific

investment goals - not the sales goals of a large, impersonal brokerage firm.

Have the flexibility & capacity to match the right investment product with each investor.

These products have been reviewed by our investment committee and meet our stringent

selection criteria.

We rely on local decision-making, internal research plus third party independent

research.

We use a disciplined investment approach.

Accountability

As a regulated Capital Management Firm in Vietnam, we are licensed by SSC. In

addition to adhering to our independent auditing requirements, our investment officers

regularly review the operation and investment best practices we have in place.

We have a legal obligation to place our clients’ interest first.


48

We are well connected local

VIPC has a strong well connected local network, such as Commercial Banks, major land

banks, our real estate project focuses on commercial buildings, residential areas, service

apartments, office buildings as well as new modern complexes providing all of the above

services in one location.

We speak global investment languages, we understand business & your needs, we are

local Vietnamese but with well perception of global investments, 50% of our staff

received MBA degree and specialized in finance field with personal proven track record.

Documents

Vipc capital management company brochure 2010