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VinaCapital Vietnam Opportunity Fund invests in Thu Cuc International General Hospital

VOF TCI Health Hospital

VinaCapital Vietnam Opportunity Fund has announced that it has made a private equity investment in Thu Cuc International General Hospital (TCI). VinaCapital led a consortium to invest USD26.7m to obtain a significant minority stake along with a board seat in the well-known health care provider, which is currently undertaking a significant expansion.

Thu Cuc International General Hospital – a leading private hospital

TCI was established in 2011 in one of most populated and rapidly developing areas of Hanoi by Ms Nguyen Thu Cuc, who in 1996 became the first woman to launch and operate a private health care company in northern Vietnam. Vina Capital says that, by working with some of Vietnam’s most experienced and leading doctors, Ms Cuc quickly established TCI as a trusted destination for high quality services at affordable prices in the fields of obstetrics and gynaecology, oncology and offering comprehensive health checks. TCI has the enviable achievement of being one of first private hospitals in Vietnam to win ISO-15189 accreditation for clinical laboratory testing service quality.

TCI employs more than 1,400 staff, including over 230 doctors, many with 20 years or more experience at leading national hospitals. TCI’s nine departments encompass twelve medical specialties. In early 2019, a new 5,000 square meter general clinic was opened to handle outpatient visits and corporate health checks. In early 2020, TCI completed a 10-storey extension to the main hospital to more than double its in-patient capacity. The facility uses state-of-the-art diagnostic equipment and adheres to international standards of management.

Comments from Ms Nguyen Thu Cuc, Founder and Chairwoman of TCI

“We are delighted to partner with VinaCapital. They have a long track record of investing and working with private health care providers like TCI to optimize resources, improve operations and, ultimately, allow us to deliver an even higher level of care to more patients. Their experience in this sector and partnership will be invaluable as we look to further expand the range and level of services we provide.”

Comments from Andy Ho, Chief Investment Officer at VinaCapital

“TCI is widely recognized as one of the top private hospitals in Hanoi, a position they have reached in a relatively short amount of time. That speaks to the vision and focus of the founder, the dedicated and professional medical staff, and high quality of care they provide.”

“As Vietnam’s middle class continues to expand, consumers are seeking greater access to private medical services, which help relieve the burden on the public health sector. As one of the first investors in the private health care industry in Vietnam dating back to our investment in Hoan My in 2009, VOF has long recognized the enormous growth potential of this industry. TCI joins our existing health care portfolio of Thai Hoa in the Mekong Delta region, and Tam Tri Medical Corporation, which has hospitals in southern and central Vietnam. This investment in TCI will bring the VOF portfolio exposure to the health care and pharmaceutical sector to 8% of NAV and will position VOF as the leading private equity investor in private hospitals and clinics in Vietnam.”

“The first half of the 2020 calendar year has been one of the most challenging investment and economic periods in the fund’s history. During this period, we have successfully proven that we are able to divest existing investments above their carrying values in the portfolio and use the proceeds of investments to continue to make private equity investments, including TCI.”

“During the first six months of 2020, VOF has enjoyed an total return of 1.7% (unaudited, exclusive of the positive impact from share buybacks, USD terms). This performance compares well with the VN Index, which fell 13.8% and during this period of unparalleled challenges, supports our belief that having a diversified strategy investing in Vietnamese public and private equities as well as structured investments, can deliver a superior risk-adjusted returns in the medium to longer term. In addition, being a listed investment fund on the London Stock Exchange, VOF offers the added benefit of liquidity and flexibility to investors who may seek access to private equity exposure in Vietnam through a listed vehicle.”

[QD comment: Now is an interesting time to be investing in healthcare in Vietnam. Vietnam has been a bright spot for its management of covid-19 (a combination of strict lockdown and quarantining measures, effective contact tracing and strong public messaging), but the pandemic will likely lead to a greater focus on personal health, particularly from the emerging middle class, which has the means to pay for such services, [providing a boost across the sector]. 

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