Vietnam Enterprise (VEIL), the largest of the three London-listed Vietnam funds, plans to hold the second of three tender offers it promised after nearly losing a continuation vote last summer.
Charles Cade, the interim chair who took over the £1bn investment company in January, gave no details in the 2025 annual results but said the second exit would be announced in “due course”. He took charge after chair Sarah Arkle stepped down following the completion of the first 10% tender offer citing the “significant time commitment” she had to make in the previous six months.
Stung by the 41% of votes cast against continuation at the annual general meeting last June, VEIL aims to cut its wide discount to net asset value (NAV) to under 10%.
To that end, it has upped share buybacks, repurchasing £157.5m last year and a further £52.2m this year, which is on top of the £147.7m returned to shareholders in the 10% tender offer.
Including £94.7m of buybacks in the previous year, VEIL has shrunk by £452m to shareholders since the start of 2024.
However, the sustained buybacks combined with a strong recovery in Vietnam, whose economy grew around 8% last year, narrowed the gap between the share price and NAV from a low of 22% in the past 12 months to 13% today.
The re-rating meant UK shareholders saw a total return of 29.9% last year ahead of the 15.9% growth in NAV. In terms of dollars, VEIL’s primary currency, the shareholder return was 36.1% with a 24.5% underlying NAV return.
This underperformed the Vietnam Index (VNI) which soared 43.2% in local currency, 38.8% in dollars and 29.2% in pounds.
As previously reported, the key factor was the exceptional performance of conglomerate Vingroup which soared 711% in dollar terms, after Vietnamese private investors jumped on the stock as a beneficiary of the government’s major infrastructure spending programme. Excluding the $40bn industrial, real estate and technology group reduced the VNI’s dollar return to just 12.1% last year.
VEIL’s fund managers at Dragon Capital responded by adding to their position in Vingroup, which stood at 9.1% of assets at 31 December. This was the fund’s largest holding though it remained 6.6% less than the index exposure as they worried about the stock’s high valuation and eroding the portfolio’s diversification. However, they also ended 2025 with 6.1% in its $16bn Vinhomes subsidiary, which rallied 200% during last year. That position was 2% more than the index.
By 31 March, the positions in Vingroup and Vinhomes had been reduced to 4.5% and 4.2% making them the fifth and sixth biggest holdings. Mobile World, the $4.6bn phone retailer and grocery chain group, is the largest position at 8.3%.
VEIL’s assets plunged 11.4% in March in response to the economic shock waves from the war in the Middle East and the surge in oil prices, as Vietnam is a big importer of energy. This was slightly better than the VNI’s 11.9% decline and left the financials and real estate weighted portfolio down 6.5% in the first quarter, with the shares falling 8.4% in sterling terms.
That cut VEIL’s sterling return to 24% over one year with three and five-year shareholder returns at 26.6% and 21.7%, trailing the 47.5% and 33.3% from the index. It has promised to hold a tender offer in 2030 if five-year underlying NAV returns lag the benchmark.
Cade, a former head of investment company research at broker Deutsche Numis, said “significant enhancements” had been made to marketing and PR resources to raise VEIL’s profile. Cade, who also chairs the UK equity income trust Temple Bar (TMPL), said the “core long-term drivers of economic growth remain in place, with healthy foreign direct investment, rising urbanisation and the emergence of the middle class consumer.”
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