Warburg Pincus and VinaCapital establish US$300 million hospitality joint venture

The $300-million joint venture is expected to become Vietnam’s pre-eminent hotel platform and looking to expand into other leading hospitality markets in Southeast Asia. The long-term goal is to capture the fast growth in tourist arrivals, especially from China, to the region over the next 5-10 years.

The joint venture seeks to grow its assets through acquiring, repositioning, and enhancing well-situated city hotels in key first-tier cities and developing luxury resorts in leading resort destinations across Southeast Asia.

Besides, it plans to acquire and partner with other hotel management companies and platforms to further enhance its management capabilities, brand, and asset coverage.

“With tourist arrivals expected to more than triple over the next ten years in the region, hospitality and tourism will be at the forefront of driving the region’s fast growth. We look forward to expanding the footprint of the joint venture across the region with the goal of an eventual IPO,” said Jeffrey Perlman, managing director and head of Southeast Asia at Warburg Pincus.

Founded in 1966, Warburg Pincus is a leading global private equity firm that focuses on growth investment. It manages more than US$40 billion in private equity assets and has raised 15 private equity funds that have invested in excess of US$58 billion in more than 760 companies and 40 countries.

The firm has a proven investment track record in the consumer and retail sectors globally and in Asia, building successful businesses and leading brands, such as CAR Inc., Kidswant, Intime Department Store, and Red Star Macalline, as well as Franshion Properties and 7 Days Inn.

Earlier in June 2015, Warburg Pincus completed a follow-on minority investment of approximately US$100 million in Vincom Retail, a subsidiary of Vingroup. This brings Warburg Pincus’ total investment in Vincom Retail to US$300 million, making it one of the largest investments by a private equity firm ever in Vietnam.

Meanwhile, VinaCapital is a leading investment management and real estate development firm in Vietnam, with a diversified portfolio of US$1.4 billion in assets under management.

VinaCapital has disbursed its investments in Vietnamese private companies through its closed-end investment fund, Vietnam Opportunity Fund (VOF). The latest VOF investment was an investment partnership with German KfW Group's DEG Fund, to pump US$30 million into Vietnamese wood product manufacturer An Cuong Wood-Working Materials.