By Anshuman Daga
SINGAPORE, March 22 (Reuters) - Warburg Pincus is findingnew investment targets in the consumer, banking and logisticssectors of Vietnam as its economy grows and capital marketsdevelop, said the regional head of the private equity firm whichhas committed over $1 billion in Vietnam.
"It's a market that we think there's a lot of opportunityin," Jeffrey Perlman, Southeast Asia chief for Warburg, toldReuters in an interview on Thursday. "Four, five years ago, evenin Vietnam there wasn't an understanding of what was privateequity and what it will do to businesses."
Vietnam's emergence as a large manufacturing destinationnext to China helped the Southeast Asian nation's economy growat 6.8 percent last year, the strongest since 2010. The growthis rapidly building up a huge middle class that is boostingconsumer spending in a country of about 100 million.
Its stock index has risen 20 percent this year, thebest performance in Southeast Asia, after surging by 50 percentlast year.
Perlman said the growth in Vietnam's capital markets to $200billion in value from some $35 billion five years ago, was a bigdraw for global investors, and he expected local regulators tobring in more reforms to develop the markets.
Warburg is the largest private equity investor in Vietnam,which has also seen sizeable investments from rivals KKR & Co.and TPG.
Warburg's first Southeast Asian investment was in Vietnameseshopping mall owner Vincom Retail, in which itsconsortium invested $300 million. Vincom Retail's shareholdersraised over $700 million in November, valuing it at $3.4billion, helping Warburg more than double its investment.
This month, Warburg announced a $370 million investment inVietnam Technological and Commercial Joint Stock Bank, a sectorPerlman said was set for huge growth.
"You have two-thirds of the population who don't have a bankaccount. More than 90 percent don't have access to credit cards.There is a huge runway in front," he said.
Though company valuations were high across many marketsglobally, Vietnam's strong growth prospects stood out. "You havean ability to potentially pay a fuller price when there'sactually growth underlying the investment," Perlman said. He didnot specify how much more Warburg plans to invest in the countryor identify potential targets.
Warburg Pincus' current seven portfolio companies inSoutheast Asia, include a venture with Vietnamese propertydeveloper Becamex, Indonesian ride-hailing firm Go-Jek andSingapore-based ARA Asset Management.(Reporting by Anshuman DagaEditing by Muralikumar Anantharaman)
