Ducchi T. Quan

AI Capital was recently established by a group of banking, finance and business professionals who have come together to form a boutique investment firm that solely focuses on M&As. Our team uniquely combines Vietnam market knowledge and relationships with international experience to deliver unique opportunities to our clients.

When we say M&A at AI Capital, we use it in the simple, classic investment banking sense of the term - our investment strategy is to acquire good businesses that we transform into great businesses by unlocking value through financial re-engineering, management reorganisations, and improvements in business processes.

One way to create a great business is to merge enterprises to reap the benefits of improved scale and operational efficiencies.

How do you evaluate the future M&A trend in Vietnam?

As the Vietnamese economy further develops and integration with the global market deepens, undoubtedly M&A activities will increase exponentially. Currently, we are seeing a lot of companies expand by opening new lines of businesses. However, one can also expand through consolidation. As domestic companies grow and mature, continued rapid organic growth will increasingly be more difficult. So I believe growth from M&A activities will fill this need.

Furthermore, the unabated speed of Vietnam’s market development encourages foreign companies that wish to enter this market to do so via a merger with, or an acquisition of, a local enterprise. The current market is such that increasingly foreign companies will find it more feasible to buy into a sound local operation rather than building one from scratch.

It is estimated that Vietnam has so far had about 30 M&A deals. But they are only confined to strategic investment and selling and buying shares on a small scale. AI Capital’s strategy in the time to come will be to buy a large number of shares, about 30-40 per cent and even 100 per cent of shares of an enterprise.

A seller always wants to sell goods at a high price and a buyer wants to offer a lower price. What is AI Capital's strategy to harmonise this relationship?

When distilled, the AI Capital strategy is plain. We find good companies and help them become great ones. We help strengthen the company by transferring our expertise - financial, management, strategic - and we help the company grow through mergers or acquisitions of other synergistic enterprises. AI Capital demonstrates its belief in its actions by making investments in the companies it works with. At the end of the day, we work with the company and its management to enhance shareholder value.

AI Capital pursues its investment strategy within a few selected sectors of focus in Vietnam, including consumer products, financial services, entertainment, education, energy/infrastructure and real estate. We have a unique information edge within these sectors and, therefore, we solely concentrate our resources within these zones. We are currently studying more than 10 projects, but in the first year of joining the market, we target to take part in just three or four of them.

Vietnam has few companies operating in the M&A field, but to succeed it is necessary to compete. Could you explain AI Capital's edge in this marketplace?

Our edge can be summarised by our adage "The Right Connections. The Right Knowledge. The Right People." Our senior management team members have long established relationships in Vietnam, forged through decades of experience in the region. With that experience, we have the expertise required to evaluate the opportunities presented to the firm and to generate investible ideas from those.

There needs to be competition if the market is to develop well, but in Vietnam the market is still too wide for competition. I wish to see the market divided into several areas so as to make accurate assessment of each enterprise. AI Capital's development plan is to buy and restructure an enterprise and then sell it to another partner. But in the first phase, AI Capital will concentrate in buying.