Vietnam is experiencing significant economic growth, driven by a proactive government and strategic positioning in global supply chains, according to Warburg Pincus CEO Jeffrey Perlman. Speaking at an investment conference hosted by Techcombank, Perlman expressed confidence that tariffs would not hinder Vietnam's economic momentum.
He commended the Vietnamese government for its business-friendly policies and efforts to streamline bureaucracy, which he described as “noticeable and very positive.” Perlman highlighted Vietnam's strengthened trade relationship with the U.S., aided by favorable tariffs established during the Trump administration, enhancing the country's competitiveness.
Vietnam is emerging as a key player in the global supply chain, particularly benefiting from the China-plus-one strategy. Perlman noted that Vietnam boasts a robust supplier base and a skilled workforce, positioning it favorably compared to other markets struggling with production scalability. He cited BW Industrial, a Warburg Pincus investment, which has successfully leased over half of its industrial space this year, indicating strong market positioning.
Perlman believes Vietnam is at a pivotal moment in its economic development. When Warburg Pincus first explored opportunities in Vietnam 13 years ago, the GDP per capita was below $3,000, and the stock market capitalization was under $40 billion. Today, GDP per capita is approaching $5,000, with stock market capitalization exceeding $200-250 billion. Perlman sees this growth as a catalyst for increased consumption and a self-reinforcing economic cycle.
Addressing liquidity concerns among private equity investors, Perlman pointed to successful IPOs like Vincom Retail and Techcombank, which demonstrate the potential for exits in the market. He emphasized the importance of stable policies and foreign investment to facilitate further growth and transition Vietnam from an emerging market to a more mature economy.
Perlman likened Vietnam's growth trajectory to that of China and India, where similar economic dynamics have led to thriving markets. Warburg Pincus's portfolio in Vietnam includes companies like e-wallet MoMo, hospital group Xuyen A, and hospitality platform Lodgis. Reports suggest that Techcombank may consider a stake sale, potentially providing an exit opportunity for investors.
Despite the complexities of the current macroeconomic and geopolitical landscape, Perlman urged investors not to be deterred. He stressed that the performance of investments is ultimately driven by the strength of the underlying businesses rather than external noise. His advice to investors is to maintain consistency in their investment strategies, emphasizing the importance of steady investment over time to achieve reliable returns.
In summary, Vietnam's economic landscape is evolving positively, supported by government initiatives and strategic global positioning. Perlman’s insights reflect a strong belief in the country's potential for sustained growth and investment opportunities.
