VIETNAM EQUITY SPECIAL ACCESS FUND PROSPECTUS OF AN OPEN-ENDED FUND

Transcription

1 The State Securities Commission of Vietnam s issuance of a license for public offering of Fund Certificates certifies that the establishment of the Fund and its Fund Certificates has been made in accordance with applicable legal regulations. The issuance of a license is not an endorsement or guarantee of the contents in this Prospectus or the Fund s objectives and strategies. VIETNAM EQUITY SPECIAL ACCESS FUND PROSPECTUS OF AN OPEN-ENDED FUND PUBLIC OFFERING OF FUND CERTIFICATES IN A SECURITIES INVESTMENT FUND This Prospectus is available at: Address: VinaWealth Fund Management Joint Stock Company 5 th Floor, Sun Wah Tower, 115 Nguyen Hue Street, District 1, Ho Chi Minh City, Vietnam Telephone: (84 8) Fax: (84 8) ir@vinawealth.com.vn Website: Information Disclosure Representative: Ms. Thai Thuan Nguyen Chairwoman cum General Director and Legal Representative Address: VinaWealth Fund Management Joint Stock Company 5 th Floor, Sun Wah Tower, 115 Nguyen Hue Street, District 1, Ho Chi Minh City, Vietnam Telephone: (84 8) Fax: (84 8) The Securities Investment Fund was established in accordance with the Law on Securities No. 70/2006/QH11 which was adopted by the National Assembly of the Socialist Republic of Vietnam on 29 June, This Prospectus was registered with the State Securities Commission of Vietnam on xx/xx/2016.

2 Table of Contents I. KEY PEOPLE PEOPLE RESPONSIBLE FOR CONTENTS OF THE PROSPECTUS... 7 A. Fund Manager... 7 B. Supervisory Bank... 7 II. TERMS/DEFINITIONS... 7 III. INVESTMENT OPPORTUNITIES A. Stable macro economy from B. Investment opportunities IV. THE FUND MANAGER - VINAWEALTH FUND MANAGEMENT JOINT STOCK COMPANY A. General information B. Major shareholders C. Board of Directors D. Management team E. Investment Committee F. Portfolio management team: G. Operational information V. SUPERVISORY BANK VI. AUDITOR VII. DISTRIBUTORS VIII. AUTHORISED ORGANIZATIONS IX. GENERAL INFORMATION OF THE INVESTMENT FUND A. Fund overview B. Summary of the Fund Charter C. Investment risks X. INITIAL OFFERING AND SUBSEQUENT TRADING OF FUND CERTIFICATES A. Legal bases B. Initial Public Offering C. Subsequent trading of Fund Certificates D. Net Asset Value and trading disclosures E. Investment programs... Error! Bookmark not defined. XI. FUND OPERATIONAL STATUS XII. CONFLICT OF INTERESTS XIII. REPORTING POLICY XIV. INVESTOR INQUIRIES XV. UNDERTAKINGS Prospectus Vietnam Equity Special Access Fund (VESAF) Page 5

3 XVI. APPENDICES Prospectus Vietnam Equity Special Access Fund (VESAF) Page 6

4 PROSPECTUS I. KEY PEOPLE PEOPLE RESPONSIBLE FOR CONTENTS OF THE PROSPECTUS A. Fund Manager Ms. Thai Thuan Nguyen General Director cum Chairwoman of the Board of Directors and Legal Representative of VinaWealth Fund Management Joint Stock Company; Ms. Hong Dung Nguyen Chief Accountant of VinaWealth Fund Management Joint Stock Company. We represent and warrant that the information and data contained herein are accurate, based on the facts presently known to us, or made known through appropriate research and analysis. B. Supervisory Bank Legal representative: Mr. NIRUKT NARAIN SAPRU Title: Chief Executive Officer of Standard Chartered (Vietnam) Bank Ltd. ( SCBVN ) This Prospectus constitutes a part of the application dossier for offering Fund Certificates of the Fund which was prepared by VinaWealth Fund Management Joint Stock Company and certified by SCBVN. According to applicable law and regulations, terms and conditions of agreement on depository and supervisory services, the Supervisory Bank only certifies the information pertaining to itself in Section V of this Prospectus. Other information contained herein is not under the certification scope of the Supervisory Bank. We represent and warrant that the analysis, assessment, and language contained in this Prospectus are processed thoroughly and appropriately based on the information and data provided by VinaWealth Fund Management Joint Stock Company. II. TERMS/DEFINITIONS The following terms are defined and used as below throughout this Prospectus. Affiliated Persons refers to definition in Section 34, Article 6 of Law on Securities No. 70/2006/QH11. Auditor means the independent auditing firm who is in the list of auditing firms approved by the SSC and licensed to provide auditing services for the Fund. The Auditor shall be appointed by the General Meeting of Investors. Board of Representative means the representatives of the Investors, who are elected by the General Meeting of Investors to supervise the operations of the Fund, the Fund Manager, and the Supervisory Bank on behalf of the Investors. Cut-off time means the deadline for which distributors may receive trading orders from Investors. Prospectus Vietnam Equity Special Access Fund (VESAF) Page 7

5 Day means business day, excluding Saturdays, Sundays, and holidays as stipulated by law. Fiscal Year means the 12-month period starting on 01 January and ending on 31 December of each calendar year, inclusive of both dates. The Fund s first fiscal year begins on the day the Certificate for Registration of Fund Establishment is issued by the SSC till 31 December of such year, inclusive of both start and end dates. Fund means Vietnam Special Access Fund which makes the initial public offering of its Fund Certificates in accordance with the Law on Securities and the Fund Charter. Fund Manager means VinaWealth Fund Management Joint Stock Company whose Operation License No. 31/UBCK-GP was issued by the SSC on 14 April, Fund Manager also means any other fund management company which is appointed as its replacement. VinaWealth Fund Management Joint Stock Company has been entrusted to be the fund manager of the Fund, with all its rights and obligations, as stipulated in the Fund Charter. Fund Certificates means the securities issued by the Fund Manager on behalf of the Fund in the form of book entry or book-keeping. A Fund Certificate represents the legitimate rights and interests of the Investors in the Fund s assets or capital, in proportion to the number of Fund Units held by such Investor. Fund Charter The Fund Charter is approved by the General Meeting of Investors and in compliance with applicable law and regulations in Vietnam Fund Dividend means the remaining Fund profits after deduction of all reasonable expenses. The Fund Dividend shall be distributed to Investors in proportion to their ownership in accordance with the General Meeting of Investors approval. Fund Unit means the book value divided into equal portions. The par value of a Fund Unit in the initial public offering is VND 10,000. Each Fund Unit represents the same amount of profit and equity in the Fund. General Meeting of Investors means the general meeting of investors who have voting rights, convened regularly and/or extraordinarily, in order to approve important matters of the Fund. The General Meeting of Investors is the highest level of authority of the Fund. Initial Charter Capital means the total capital in cash which is subscribed by all Investors in the initial public offering of Fund Certificates and is recorded in the Fund Charter. During the Fund s operation, the Charter Capital will change in accordance with any changes in the Fund s capital. Inside Information means the information relating to any public company or any public fund which has not yet been disclosed and, if disclosed, could have a major impact Prospectus Vietnam Equity Special Access Fund (VESAF) Page 8

6 on the price of the securities of such public company or public fund (Section 32, Article 6 of Law on Securities No. 70/2006/QH11). Investor means any domestic and/or foreign individual or organization holding Fund Certificates. Management Fee means the fee for the fund management services payable to the Fund Manager, as stipulated in the Fund Charter. Net Asset Value or NAV means the total value of assets and investments owned by the Fund, less its liabilities. The NAV is calculated on the day immediately prior to the Valuation Date. Open-ended fund means a public fund whose Fund Certificates is offered to the public and must be redeemed upon the Investor s request. People Who Know Inside Information refers to definition in Section 33, Article 6 of Law on Securities No. 70/2006/QH11. Prospectus means any document or electronic data that publicly discloses accurate, truthful, and unbiased information regarding the offering and distribution of the Fund Certificates. Redemption Price means the price payable by the Fund Manager to redeem a Fund Certificate from an Investor. The redemption price shall be equal to the net asset value per Fund Certificate less the redemption fee as stipulated in the Fund Charter. "SSC" means the State Securities Commission of Vietnam. Subscription Fee/ Redemption Fee means the fee an Investor has to pay when subscribing or redeeming a Fund Certificate. The subscription fee shall be calculated proportionately based on the subscription price. The redemption fee shall be calculated proportionately based on the total redemption value, as stipulated in the Fund Charter. Subscription Price means the price an Investor pays to purchase a Fund Certificate. The subscription price shall be equal to the par value (in the initial public offering) or equal to the Net Asset Value per Fund Certificate (on the subsequent trading dates) plus the subscription fee as stipulated in the Fund Charter. "Supervisory Bank" or "SCBVN" means Standard Chartered (Vietnam) Bank Ltd., whose Registration License No. 236/GP-NHNN was issued by the State Bank of Vietnam on 08 September, 2008 and Securities Depository Registration Certificate No. 08/UBCK-GCN was issued by the SSC on 07 May, Supervisory Bank also means any other supervisory bank which is appointed as its replacement. Services to be provided by the Supervisory Bank include: (i) safekeeping and custody of securities, documents relating to legitimate ownership of the Fund, economic contracts, and documents relating to the Fund s assets, and (ii) supervising the asset management activities performed by the Fund Manager. Prospectus Vietnam Equity Special Access Fund (VESAF) Page 9

7 The rights and obligations of the Supervisory Bank are stipulated in the Fund Charter. Supervisory Contract means the contract which was entered into by and between the Fund Manager and the Supervisory Bank and approved by the Fund s General Meeting of Investors. Trading Date (T date) means the Valuation Date on which the Fund Manager, on behalf of the Fund, issues or redeems Fund Certificates. Valuable Papers means the papers evidencing the obligation of debt repayment between the issuer of the valuable papers and the holder of such valuable papers. The Valuable Papers are based on certain time periods and subject to certain conditions, including interest payments, in accordance with Section 8, Article 6 of Law on Banking No. 46/2010/QH12 of the State Bank of Vietnam. Valuation Date means the day on which the Fund Manager determines the Fund s Net Asset Value in accordance with the Law on Securities and the Fund Charter. III. INVESTMENT OPPORTUNITIES A. Stable macro economy from ) In 2015, Vietnam s GDP growth was 6.68%, the highest increase in the past 5 years and also outperformed the target of 6.2% set at the beginning of the year. 2) Inflation was under control: the Consumer Price Index (CPI) increased by 0.63% in 2015, the lowest increase in the past 15 years and is expected to be low in the next few years (below 5%), primarily due to expected low input costs and effective currency control. GDP growth vs Inflation Source: General Statistics Office of Vietnam (GSO) Prospectus Vietnam Equity Special Access Fund (VESAF) Page 10

8 3) Return of trade deficit yet manageable: after 3 consecutive years of trade surplus (from ), Vietnam recorded a trade deficit of USD4.1 billion in 2015, equivalent to 2.5% of exports. In comparison with a trade deficit of USD12.6 billion (17.5% of exports) and USD9.9 billion (9.9% of exports) in 2010 and 2011, respectively, the trade deficit in 2015 is considered necessary for further development of Vietnam s manufacturing sector as Vietnam needs to import most of the equipment and raw materials required for manufacturing. 4) Foreign Direct Investment (FDI) continues to increase: registered FDI in 2015 was USD22.8 billion, increasing by 3.8% that the registered FDI in The registered FDI for processing and manufacturing projects in 2015 was USD15.2 billion (66.9% of total registered FDI), increasing by 5.1% against 2014 numbers. In 2015, 2013 new projects received FDI, increasing by 425 projects compared to Free Trade Agreements (FTAs) which are expected to be signed in the near term will further boost FDI to Vietnam in the coming years. Export-Import of Vietnam from Source: GSO FDI disbursement and Registered FDI Source: Foreign Investment Bureau Ministry of Planning and Investment 5) Positive credit growth: Due to the recovery of the economy and low lending rates (below 10% p.a.), manufacturers were encouraged to borrow in order to enhance their manufacturing activities. As of the end of 2015, credit growth was 18% compared to 14% in In order to continue economic expansion, the State Bank of Vietnam (SBV) has set credit growth for 2016 to be 18% - 20%. Source: SBV Prospectus Vietnam Equity Special Access Fund (VESAF) Page 11

9 B. Investment opportunities Vietnam s capital markets are expected to continue to mature and develop over the next 3-10 years, due primarily to the following factors: 1) In 2015, Vietnam deepened its integration with the global economy. The most significant milestone was the completion of negotiations for the Trans-Pacific Partnership Agreement (TPP). According to the analysis by the World Bank, if ratified, the TPP will contribute an additional 10% growth to Vietnam s GDP up to In addition to the TPP, in 2015, Vietnam also signed 15 bilateral free trade agreements (FTAs) with a number of other Asian and European economies. These agreements will likely help attract two additional sources of capital into Vietnam: (1) foreign direct investment (FDI) should continue to flow into Vietnam in order to enjoy favourable tariffs as well as low labour costs; and (2) foreign indirect investment (FII) is expected to increase in order to take advantage of growth opportunities in the stock market. 2) Vietnam s state-owned enterprises (SOE) are expected to continue their privatization activities, adding supply to the stock market. In 2014 and 2015, major SOEs were privatized, including Vietnam Airlines (Vietnam s leading airline), Vinatex (textiles manufacturing and distribution), ACV (airlines services company) and Vinatea (tea processing and distribution). From 2016 to 2020, other major SOEs are expected to be privatized, including Vissan (meat and agricultural processing and distribution), Mobifone (mobile phone operator), Vinalines (transportation and logistics) and SamCo (transportation). 3) Valuation of Vietnam s stock market is still rather low relative to other markets in the ASEAN region, despite the market s high growth potential in the near to medium term. In the coming years, Vietnam s GDP growth is expected to be among the highest in the world, while Vietnamese companies and Vietnam's stock market are still in early stages of development, with high potential for future growth. At the same time, Vietnam s stock market is currently trading at a price-toearnings ratio of <13 times and price-to-book ratio of <2 times, approximately 30% lower than neighbouring markets like Indonesia, Philippines, Thailand and Malaysia, potentially making Vietnamese securities more attractively priced than those in comparable markets. Accordingly, investors may be more likely to enjoy capital appreciation over the coming years as we expect the valuation gap to close as Vietnam s economy and capital markets continue to develop. 4) Financial products like mutual funds and ETFs, which are fairly recent newcomers to Vietnam s stock market, are expected to continue to attract investments from both foreign and local investors. Additionally, new products such as derivatives and private pension funds should come to the market over the next 1-2 years, increasing investor choice and attracting more capital flows. IV. THE FUND MANAGER - VINAWEALTH FUND MANAGEMENT JOINT STOCK COMPANY A. General information The Fund Manager was incorporated in accordance with the license for establishment and operation No. 31/UBCK-GP which was issued by the SSC on 14 April, Headquarters: 5 th Floor, Sun Wah Tower, 115 Nguyen Hue Street, District 1, Ho Chi Minh City. Tel: +84 (0) Fax: +84 (0) Term of operation (if any): licensed since April 2008, operating under the revised name of VinaWealth Fund Management Joint Stock Company since April The Fund Manager has a charter capital of VND 62,000,000,000, of which 51% is held by two members of the Vietnamese business family that originally founded the company, and 49% by VinaCapital Corporate Finance Limited, a wholly-owned subsidiary of VinaCapital Group. The diagram below shows the organizational and ownership structure: Prospectus Vietnam Equity Special Access Fund (VESAF) Page 12

10 B. Major shareholders No. Shareholder Number of shares Ownership percentage 1 VinaCapital Corporate Finance Limited 3,038,000 49% 2 Mr. Truong Phu Pham (Vietnamese businessman) 3 Ms. Nhu Quynh Pham (Vietnamese businesswoman, sister of Mr. Truong Phu Pham) 2,666,000 43% 496,000 8% Total 6,200, % VinaCapital Corporate Finance Limited is a wholly-owned subsidiary of VinaCapital Group (hereinafter referred to as VinaCapital ), a leading investment fund management and real estate development company founded in 2003 and incorporated in the British Virgin Islands. Through its various subsidiaries, VinaCapital Group operates funds that invest into different asset classes in Vietnam, including listed equity, private equity, fixed income and real estate. Currently, VinaCapital has one of the three largest fund management operations in Vietnam, with among the highest total assets under management in Vietnam, totalling over USD1.3 billion (as of July 2016). VinaCapital's operations in Vietnam include the following funds which are currently under management by management companies in VinaCapital s corporate group: VinaCapital Vietnam Opportunity Fund Limited (VOF), a diversified investment fund that invests in all asset classes, including listed securities, private equity, real estate and fixed income instruments. VinaLand Limited (VNL), a real estate fund which directly invests into and develops real estate projects in the residential, retail, hospitality, and office sectors. Prospectus Vietnam Equity Special Access Fund (VESAF) Page 13

11 Vietnam Infrastructure Limited (VNI), a fund that invests in infrastructure projects and companies including transportation, logistics, energy, telecommunications, and environmental services. DFJ VinaCapital L.P, a technology venture capital fund with USD 32 million in assets that is comanaged by VinaCapital and Draper Fisher Jurvetson. VinaCapital has offices in Ho Chi Minh City, Hanoi and Singapore. Additional information about VinaCapital can be found at C. Board of Directors Mr. Andy Ho Chairman Mr. Andy Ho is Chairman of the Fund Manager s Investment Advisory Committee, and Managing Director cum Chief Investment Officer of VinaCapital, where he oversees the capital markets, private equity, fixed income, and venture capital investment teams. Previously, Mr. Ho was Director of Investment at Prudential Vietnam's fund management company, where he managed the capital markets portfolio and Prudential's bank investment strategy. He also held management positions at Dell Ventures (the investment group of Dell Computer Corporation) and Ernst & Young. Mr. Ho is a leading authority on capital markets investment, privatizations, and private equity deals and structures in Vietnam, where he has led private placement deals totalling nearly USD 1 billion. Mr. Ho holds an MBA from the Massachusetts Institute of Technology and is a Certified Public Accountant (CPA) in the United States. He is also a licensed fund manager in Vietnam. Mr. Truong Phu Pham Vice Chairman Mr. Truong Phu Pham is an experienced business executive with a diverse professional background. In addition to being a co-founder and Vice-Chairman of VinaWealth, he is currently the CEO of GIBC, a company which was established with the mission of facilitating the integration and sustainable growth of Vietnamese businesses. He is also the Chairman of Truong Loc Group, which spearheads multiple hospitality and residential property developments, the Chairman of Hoang Phat Investment JSC and a member of the Board of Management of Viet Tide Corporation. Earlier in his career, Mr. Truong held positions as Marketing Manager for PepsiCo Vietnam and Vietnam Water World (1998 and 2004). In addition to his professional roles, Mr. Truong is proud to serve as the co-founder of Vietnam CEO Forum , and a member of the Board of the Ho Chi Minh City Young Business Association (YBA) Ms. Thai Thuan Nguyen Member Ms. Thai Thuan joined the Fund Manager in January 2014 and is currently Chairwoman of the Board of Director cum General Director of the Fund Manager. Ms. Thai Thuan began her career in the United States, where she worked for 7 years as a management consultant, first for Hay Management Consultants and subsequently for Monitor Company (now Monitor-Deloitte). She came back to Vietnam in April 2008, when she joined VinaCapital and was responsible for post-investment monitoring, fundraising and strategic planning. In January 2012, she joined Vietnam Investments Group (VIG), a leading private equity firm in Vietnam. At VIG, Thai was responsible for pre and postinvestment research and analysis, investor relations and firm human resources. Ms. Thai Thuan holds a Master s degree in Business Administration from the Wharton School of Business of the University of Pennsylvania, and a Bachelor s degree in Psychology from Harvard University. She is also a licensed fund manager in Vietnam. Prospectus Vietnam Equity Special Access Fund (VESAF) Page 14

12 Mr. Brook Taylor Member Brook Taylor has nearly 20 years of management experience, including over 15 years in Vietnam as a Senior Partner with major accounting firms. Previously, Mr. Taylor was Deputy Managing Partner of Deloitte in Vietnam and Head of the firm's audit practice. He was also Managing Partner of Andersen Vietnam and a Senior Audit Partner at KPMG. Mr. Taylor has expertise spanning financial audits, internal audits, corporate finance, taxation, business planning and IT systems risk management. He has an MBA from INSEAD, a BA in Commerce and Administration from Victoria University of Wellington, New Zealand, and is a member of the New Zealand Institute of Chartered Accountants. D. Management team Ms. Thai Thuan Nguyen Chairwoman of the Board of Directors cum General Director See Ms. Thai Thuan's biography above under "Board of Directors". Mr. Man Van Tran Director, Equity Investments See Mr. Man's biography above under "Portfolio Management Team". Ms. Nguyen Thao Tran Senior Analyst, Equity Investments See Ms. Nguyen s biography under Portfolio Management Team. Ms. Nhung Hong Dinh Senior Analyst, Fixed Income Investments See Ms. Nhung s biography under Portfolio Management Team. E. Investment Advisory Committee Mr. Andy Ho Chairman of the Investment Advisory Committee See Mr. Ho's biography above under "Board of Directors". Ms. Thai Thuan Nguyen Member of Investment Advisory Committee See Ms. Thai Thuan's biography above under "Board of Directors". Ms. Hoai Thu Nguyen, Member of Investment Advisory Committee Ms. Thu is a Managing Director at VinaCapital, where she oversees listed equity investments. Ms. Thu has 12 years of experience with Asian capital markets, having worked for DBS Bank (Singapore), DBS Asset Management (Singapore) and BankInvest Group (Denmark). Her last position before joining VinaCapital was co-founder, CEO and CIO of Vietnam Asset Management, where she executed a successful 7-year track record managing open-ended funds investing in Vietnamese equities. Ms. Thu holds a Bachelor of Business Administration (First Class Honours) from the National University of Singapore and has been a CFA charterholder since She is also a licensed fund manager in Vietnam. Mr. Duong Tuan Vuong, Member of Investment Advisory Committee Prospectus Vietnam Equity Special Access Fund (VESAF) Page 15

13 Mr. Duong is Deputy Managing Director at VinaCapital, where he oversees PIPE investments for the VinaCapital Vietnam Opportunities Fund. Mr. Duong has nearly 20 years of investment experience including the last 7 years in Vietnam. Prior to joining VinaCapital, Mr. Duong was Head of Equity Research at PXP Vietnam Asset Management where he managed a team of analysts responsible for producing investment ideas for all of the firm's portfolios. Prior to working in Vietnam, he held various positions overseas, including Senior Investment Analyst for ADIA in Abu Dhabi and Banks Analyst for Merrill Lynch in London. He is a CFA charter holder, having gained the CFA designation in F. Portfolio management team: Mr. Man Van Tran Director, Equity Investments Mr. Man has over 10 years of experience in the financial services industry. Prior to joining the Fund Manager, Mr. Man worked for 6 years at VietFund Management Company (VFM) in various positions, including Head of the Portfolio Management team, where he was responsible for investment strategy, asset allocation and investment selection. Prior to joining VFM, Mr. Man worked for 2 years as an auditor at A&C Auditing Company. Ms. Nguyen Thao Tran Senior Analyst, Equity Investments Nguyen has been with VinaWealth for over four years, and assists the lead portfolio manager on management of VinaWealth s equity opened-ended fund and other equity investment products. Prior to joining VinaWealth, Nguyen spent nearly one year with ANZ Bank (Vietnam) Ltd in the capacity of Transaction Banking Trainee. Nguyen holds a Master s Degree in Investment Analysis (Distinction) and a Bachelor s Degree in International Business & Economics from Aston University, Birmingham, United Kingdom. Nguyen is a licensed fund manager in Vietnam and a CFA Level 3 candidate. Ms. Nhung Hong Dinh Senior Analyst, Fixed Income Investments Nhung has 10 years of experience in investment research, investment management and banking. At VinaWealth, she assists in managing the fixed income portfolio, with AUM of over USD75 million including assets for both VinaWealth and VinaCapital. Prior to joining VinaWealth, Nhung worked for Deutsche Bank for 3 years, where she was responsible for coordinating the DB regional team in managing client investment accounts. Previously, Nhung was part of the Treasury team at Vietbank, the Equity Trading team at VinaSecurities and was a management trainee at Manulife Vietnam Fund Management Company. Nhung holds a Master s degree in International Finance from Skema Business School (France), an MBA from the French Vietnamese Center for Management Education (CFVG) and a Bachelor degree in English from the Ho Chi Minh University of Social Sciences & Humanities. Nhung also has a Vietnamese Fund Management license granted by the State Securities Commission of Vietnam. G. Operational information The Fund Manager was formerly known as "Thep Viet Fund Management Joint Stock Company", which was established on 14 April 2008 with Operation License No. 31/UBCK-GP, issued by the SSC. Thep Viet Fund Management Joint Stock Company had an initial charter capital of VND 25 billion. Pursuant to Decision No. 625/QD-UBCK by the SSC s Chairman on 24 August 2011, Thep Viet Fund Management Joint Stock Company was approved to proceed a private placement of 1,421,500 (one million four hundred twenty-one thousand five hundred) shares to VinaCapital Corporate Finance Limited and to increase its charter capital to VND billion (thirty-nine billion two hundred and Prospectus Vietnam Equity Special Access Fund (VESAF) Page 16

14 fifteen million dongs). Upon completion of the private placement, VinaCapital Corporate Finance Limited held 1,921,500 (one million nine hundred twenty-one thousand five hundred) shares, accounting for 49% of the company s charter capital. Subsequently, the company s name was officially changed to VinaWealth Fund Management Joint Stock Company pursuant to amended license No. 33/GPDC-UBCKNN issued by SSC on 20 April On 4 November 2013, the Fund Manager increased its charter capital to VND 62 billion in accordance with amended license No. 34/GPDC-UBCK issued by SSC. The Fund Manager is the pioneer in open-ended fund management in Vietnam. The VinaWealth Enhanced Fixed Income Fund (VFF) was the first open-ended fund in Vietnam to obtain the Certificate of Registration for Public Offering by SSC on 12 December VFF completed its IPO and was successfully incorporated in April The Fund Manager also launched successfully its second fund - the VinaWealth Equity Opportunity Fund (VEOF) with Certificate of Incorporation No. 12/GCN-UBCK, issued by SSC on 01 July The Fund Manager, in collaboration with VinaCapital, is also managing a UCITS open-ended fund Forum One VCG Partners Vietnam Fund (VVF), which was established in July 2015 in Luxembourg, with the initial assets under management of USD 97 million. The Fund Manager files financial and other statutory reports with SSC on a monthly, quarterly, halfyearly and annual basis. Half-year and audited full-year financial statements are available on the Fund Manger s website at for review. The Fund Manager will also furnish copies of its audited financial statements upon request. V. SUPERVISORY BANK The Supervisory Bank, Standard Chartered (Vietnam) Bank Ltd. was incorporated under License No. 236/GP-NHNN, issued by the State Bank of Vietnam on 08 September 2008, and Securities Depository Registration Certificate No. 08/GCN-UBCK, issued by SSC on 07 May Address: , 18 th Floor, Keangnam Hanoi Landmark Building, E6 Plot, Pham Hung, Nam Tu Liem District, Ha Noi. Tel: (84-4) Fax: (84-4) Term of operation (if any): SCBVN is part of Standard Chartered PLC, a British multinational banking and financial services company founded in 1969 and headquartered in London. SCBVN has been operating in Vietnam as a 100% foreign-owned bank since Core business lines: Commercial banking targeting both retail and institutional customers, wealth management services, wholesale banking, fund and securities services. VI. AUDITOR The Fund Manager shall annually propose at least two reputable and experienced auditors from the SSC s auditor list for the Board of Representatives consideration and selection, as authorised by the General Meeting of Investors. VII. DISTRIBUTORS Subject to market demands, distribution strategy and fund size, the Fund Manager shall select and enter into distribution agreements with distributors and/or trustee service providers in accordance with Prospectus Vietnam Equity Special Access Fund (VESAF) Page 17

15 applicable law. The list of distributors is provided in Appendix 5. VIII. AUTHORISED ORGANIZATIONS Based on the Fund Manager s needs and on SCBVN s capacity, prestige and expertise, the Fund Manager has contracted with SCBVN to provide fund administration services. The Fund Manager has also signed agreements with the Vietnam Securities Depository ( VSD ) to provide transfer agency services. IX. GENERAL INFORMATION OF THE INVESTMENT FUND A. Fund overview 1) Contact information Vietnamese name: English name: Abbreviated name: Quỹ Đầu tư Cổ phiếu Tiếp cận Thị trường Việt Nam Vietnam Equity Special Access Fund VESAF Address: 5 th Floor, Sun Wah Tower, 115 Nguyen Hue Street, District 1, Ho Chi Minh City, Vietnam Telephone: (84-8) Fax: (84-8) Type of Fund: Public open-ended fund Term of operation: Indefinite. 2) Certificate of Fund initial public offering (IPO) The Fund s IPO certificate number is 06/GCN-UBCK issued by the Chairman of the State Securities Commission of Vietnam on 08 February ) Fund incorporation license The Fund s license of incorporation is number TBD issued by the Chairman of the State Securities Commission of Vietnam on TBD B. Summary of the Fund Charter 1) Important information Investors should note that the following terms and conditions are summaries of the Fund Charter. For further and complete information, Investors are advised to read and understand the Fund Charter. If there is any discrepancy in the terms and conditions between this Prospectus and Fund Charter, the Fund Charter shall prevail. Investors are encouraged to seek the advice and Prospectus Vietnam Equity Special Access Fund (VESAF) Page 18

16 consultation of counsel and advisors regarding their investment decisions. 2) Overview of the Fund a) Organizational principles The Fund is a public, open-ended fund with indefinite duration. During its operation, the Fund is obliged to redeem its Fund Certificates which were issued to the Investors in accordance with the Fund Charter. The General Meeting of Investors is the highest level of authority of the Fund. The Fund s Board of Representatives shall be appointed by the General Meeting of Investors to supervise the operations of the Fund, the Fund Manager, and the Supervisory Bank. The Fund Manager has been appointed by the General Meeting of Investors to manage the Fund. The Supervisory Bank has been selected by the Fund Manager and approved by the General Meeting of Investors. The Fund s assets are custodied and supervised by the Supervisory Bank. b) Total capital and number of Fund Units offered The Initial Charter Capital of the Fund is the total capital raised in the initial public offering. The Initial Charter Capital is divided into Fund Units. Par value of each Fund Unit is VND 10,000. The Investors shall make their subscription in VND by bank transfer to the Fund s account opened at the Supervisory Bank. During its operation, the Charter Capital will change in accordance with any change in the Fund s capital. c) Appointed representative to raise funds and distribute Fund Certificates The Fund Manager s legal representative is appointed as the representative to raise fund and distribute Fund Certificates. 3) Investment objectives, policies, and restrictions a) Investment objectives The Fund s investment objective is to seek capital appreciation in the medium to long term by investing into a selected portfolio of small and medium capitalization listed stocks with strong financial performance, clear competitive advantages, leading market shares, strong growth potential, experienced management teams and attractive valuations. b) Investment strategies The Fund's investment strategies may shift from time to time in order to achieve the investment objectives based on fundamental stock analysis, macro-economic analysis, stock market Prospectus Vietnam Equity Special Access Fund (VESAF) Page 19

17 conditions and economic cycles. The Fund s investment strategies include, but are not limited to: (1) investing in small to medium capitalised listed stocks which are leaders in their respective sectors or industries in the economy; (2) investing in stocks that have attracted special attention from foreign investors due to their strategies and/or past share price performance; (3) investing in undervalued stocks with long-term growth potential; and (4) investing in stocks having high and stable earnings growth. The Fund may also selectively invest into fixed income and money market instruments from time to time as market conditions shift. The Fund Manager may elect to invest into such instruments during unfavourable or turbulent stock market conditions in order to protect the value of the Fund s portfolio while awaiting more attractive stock investment opportunities. The Fund Manager and its executives endeavour to comply with all investment restrictions and policies as stipulated in the Fund Charter. c) Investment restrictions i) The Fund s assets must be invested in compliance with the following restrictions: (a) (b) (c) (d) (e) (f) (g) (h) the Fund s portfolio must include at least six (6) securities from different issuers; not including cash present in the Fund s account maintained at the Supervisory Bank, the Fund cannot invest more than forty-nine per cent (49%) of its total assets into asset types specified in points a and b, Clause 3, Article 8 of the Fund Charter; no more than thirty per cent (30%) of total Fund assets can be invested into asset types specified in points a, b, d, e and f, Clause 3, Article 8 of the Fund Charter, issued by one company or one group of companies with related ownership. Within this limitation, the portion of investments into derivatives must be equal to the value specified in the derivative arrangement; no more than twenty per cent (20%) of total Fund assets can be invested into the issued securities of one issuer, including valuable papers, transferrable instruments, bonds (other than government bonds), shares with voting rights, shares without voting rates, convertible bonds; the Fund cannot invest into more than ten per cent (10%) of the total outstanding securities of one issuer, other than government bonds; no more than ten per cent (10%) of the Fund s total assets can be invested into asset types specified in point e, Clause 3, Article 8 of the Fund Charter; the total value of the Fund s large investments (defined as investments accounting for five per cent (5%) or more of the Fund s total assets) cannot be more than forty per cent (40%) of the Fund s total assets; at any given time, the total value of any outstanding derivative arrangements, borrowing, and other liabilities of the Fund cannot exceed the Fund s total net asset value; Prospectus Vietnam Equity Special Access Fund (VESAF) Page 20

18 (i) (j) the Fund cannot invest into any securities investment fund or securities investment company incorporated and operating in Vietnam; and the Fund cannot invest directly into real estate projects, gems, or precious metals. ii) Other than the circumstances specified in sub-paragraphs (h), (i) and (j) of paragraph (i) above, the Fund s portfolio may temporarily deviate from the investment restrictions because of the following: (a) (b) (c) (d) (e) (f) fluctuations in the value of the Fund s assets due to market price movements; the Fund is in the process of making redemptions and other allowed payments; the Fund is in the process of carrying out Investors trading orders; the issuers of the underlying investment securities are undergoing merger or acquisition; the Fund has just recently received its incorporation license or has been recently changed due to a fund split, merger or consolidation, and the time from such event is six (6) months or less, calculated from the date the Fund received its revised incorporation license; or the Fund is in the process of liquidation. iii) iv) In case of deviation from the investment restrictions due to circumstances specified in paragraph (ii) above, the Fund Manager must adjust the portfolio to meet the investment restrictions specified in paragraph (i) within three (3) months, calculated from the day the deviation first occurred. In case the Fund Manager does not comply with the investment restrictions specified by applicable regulations or the Fund Charter and this non-compliance is not due to the circumstances set out in paragraph (ii) above, the Fund Manager must adjust the portfolio within fifteen (15) days, calculated from the day the deviation first occurred. In this situation, the Fund Manager is responsible for all fees and damages (if any) associated with these investments. If the deviation results in any profit, the profit must be immediately booked to the Fund. d) Lending, borrowing and margin trading The Fund Manager is not permitted to use the Fund s capital and assets to loan or guarantee any loans, except for investments in bank deposits as stipulated in point a, Clause 3, Article 8 of the Fund Charter. The Fund Manager is not allowed to borrow in order to finance the Fund s activities, except for short-term borrowing for the Fund s essential expenditures. The total value of short-term loans (excluding advance payments) and payable amounts shall not exceed five per cent (5%) of the Fund s net asset value at any time and the maximum duration of any short-term loan is thirty (30) days. The Fund Manager is not allowed to use the Fund s assets to conduct any margin trading Prospectus Vietnam Equity Special Access Fund (VESAF) Page 21

19 (borrowing to purchase securities) for the Fund or for any other individual or organization, or to conduct short sale transactions or securities lending. The Fund is allowed to borrow and re-purchase government bonds (REPO) within a short time frame as stipulated by the Ministry of Finance regarding management of government bond trading. e) Investment selection methodology i) Equity The Fund Manager s equity investment appraisal and selection process includes fundamental company analysis, valuation, sector analysis and macro-economic analysis: Fundamental company analysis: company analysis includes analysis of business strategy, competitive position, financial indicators, growth potential, operational efficiency, corporate governance, transparency and management capabilities. Valuation: stock valuation (using both discounted cash flow and comparables) to determine intrinsic value and compare to other stocks in the same sectors (in domestic and region) to assess the target buy and sell prices. Sector analysis: the Fund Manager employs a top-down approach of selecting sectors with high growth potential, healthy profit margins, weak competition from foreigners, low cyclicality and low risk of suffering from global market fluctuations. The Fund Manager favours sectors that benefit from domestic consumption and continuing growth in Vietnam s market and economy. Macroeconomic analysis: any potential investment must be evaluated against prevailing macroeconomic conditions to assess the impact of the overall economy on the company s overall performance. The Fund Manager updates key macroeconomic indicators on a weekly basis, including but not limited to GPD growth, trade deficit, inflation, foreign exchange and credit growth. The Fund Manager frequently (at least quarterly) follows up, and updates information and business results of the investee companies to make appropriate investment decisions. ii) Fixed income and money market instruments The Fund Manager selects fixed income and money market instruments with what it believes to be the most reasonable tenures and risk-adjusted returns at the time of any such investment, which may fluctuate to reflect real market conditions. The Fund Manager will continually monitor the performance of any money market instruments in which it invests in order to ensure targeted returns are achieved from such investments. f) The Fund s Net Asset Value i) Valuation date The Fund s NAV shall be determined weekly (every Tuesday) and the first day of every month. After the Supervisory Bank confirms that the NAV was calculated correctly and in compliance with legal regulations and the Fund Charter, the NAV shall be publicly disclosed to Investors on the Fund Manager s website and other venues in accordance with applicable regulations. ii) Calculation methodology The NAV calculation methodology is stipulated in Clause 53, Chapter XI of the Fund Charter. Prospectus Vietnam Equity Special Access Fund (VESAF) Page 22

20 The valuation method was proposed by the Fund Manager in accordance with the Fund Charter and relevant regulations, was certified by the Supervisory Bank and approved by the Board of Representatives and General Meeting of Investors. 4) Fund Certificates a) Investor rights and obligations Investors can be either legal entities or individuals, onshore or offshore. Investors will not hold any legal liabilities with respect to the Fund other than those which arise from the holding of the Fund Certificates. The Investors rights and obligations are stipulated in Article 13 of the Fund Charter. b) Main Register of Investors The Fund Manager shall execute or outsource the record and management of the Main Register of Investors (Main Register), the sub-register, and certification of the Fund Certificate holdings. The Main Register and sub-registers shall have all information as stipulated in Article 14 of the Fund Charter. 5) Subscription/Redemption Process a) Investor Account and Trust Account The Fund Manager and/ or its service providers, and/ or its distributors shall perform Know Your Client (KYC) procedures on any Investors or beneficiaries who subscribe for Fund Certificates for the first time. The Fund Manager shall open trading accounts for such Investors based on the information provided in their account opening application. The Investor may open the following trading accounts: i. Account under the Investor s name (Investor s account); or ii. A sub-account under trustee s name (Investor s sub-account). Before entering into a service agreement and opening a trading account or sub-account, the Fund Manager and/ or its service provider, or the distributor shall perform KYC procedures on the Investor as stipulated by any applicable laws. The Fund Manager may refuse to open an account or sub-account for any Investor if these KYC requirements are not satisfied. The Investor may select any distributor, trustee, or the Fund Manager (hereinafter referred as distributors) which are listed in the Prospectus to open an account and trade Fund Certificates. However, the Investor should note that the trading accounts with different distributors are independent. The distributors are obligated to open accounts and perform KYC procedures on the Investor as described above for their first transaction with that distributor. The beneficiary s information in the account opening form must be the personal information of the Investor. The beneficiary account of a foreign investor must be the Investor s Indirect Investment Capital Account (IICA). Foreign investors must provide the distributors with copies of IICA opening confirmation when applying to open a fund trading account. Prospectus Vietnam Equity Special Access Fund (VESAF) Page 23

21 The Vietnam Securities Depository Centre (VSD), the authorised transfer agent of the Fund Manager, shall be responsible for verifying Investors information to confirm trading account opening. The Investor s account and sub-accounts shall include detailed information and be managed in accordance with clauses 3 and 4 of Article 14 of the Fund Charter. The Fund Manager and/or its appointed service providers shall be responsible for providing account statements within two (2) days upon receiving Investor s written request. Before opening accounts and sub-accounts, foreign investors must apply for a securities trading code in accordance with the Ministry of Finance s regulations on investment activities on the stock markets for foreigners. This provision is not applicable to Investors residing out of the territory of the Socialist Republic of Vietnam and executing transactions through a trust account of foreign trustee. Before opening a trust account, a foreign trustee must apply for a securities trading code in accordance with the Ministry of Finance s regulations on investment activities on the stock markets for foreigners. The Fund Manager s appointed transfer agent and/or trustees shall update completely, timely, and accurately the securities trading codes and holding position of foreign Investors. The agent and/or trustees shall be obliged to provide such updated information to relevant authorities upon their written request. This provision is not applicable to an offshore trustee opening trust accounts in accordance with applicable regulations. b) Fund Certificate trading Within thirty (30) days from the effective date of the Certificate of Fund Incorporation, the Fund Manager shall arrange subscription and redemption weekly on every Tuesday. If the Trading Date falls on a holiday or non-working day, it shall be held on the next Trading Date which is a business day. Investors shall complete the order slip and provide all required information accurately and in accordance with regulations as stipulated in the Prospectus and the summary Prospectus, which are published on the Fund Manager s website, and also sent to the Fund Manager s distributors. If the Fund Manager and/or its appointed distributors provide electronic trading services (via internet, telephone, or facsimile), guidance on such trading procedures must be publicly announced and must comply with the regulations on electronic trading of securities as stipulated in Point 3, Clause 1, Article 15 of the Fund Charter. The Fund Manager and its service providers shall only execute orders received prior to the Cutoff time. Any order received after the Cut-off time which is 10h30 on T-1 shall be executed on the next Trading Date. Within three (3) days from the Trading Date, the Fund Manager and/or its appointed distributors and service providers shall update the Main Register and send trading confirmation to Investors in accordance with applicable regulations. Within two (2) days from the Trading Date, if any of the Fund s appointed distributors uncover any trading errors due to mistakes related to Investor information, order collection, order input, or order transfer, the distributor must inform the Fund Manager and the associated service Prospectus Vietnam Equity Special Access Fund (VESAF) Page 24