Vietnam Entertainment Fund (VEF) – founded by Yeah1CMG, R&B Capital Group, Surfing Holdings, MBC Studio and Green International – has launched with a capitalisation value of $50 million, targeting medium- and long-term investments in the entertainment sector. This is the first open-ended fund, an investment holding company, focused on entertainment sector in Vietnam.
The five shareholders own 20 per cent each in the vehicle.
The fund, established in consultation with VinaCapital Fund Management, will operate to maximize profits for investors by increasing the capital value and dividend yield from initial investments, such as with intellectual property assets of films and fixed assets.
“It will contribute 5-45 per cent of investment capital in each film project, depending on producers’ demands,” said VEF’s CEO Nguyen Cao Tung.
According to its plan, the fund will invest in 30 A-class film projects and 20 B-class projects, purchase all films released in the 2013-2017 period, advertise projects in 40 cinema complexes by 2020, and own a new cinema complex by 2022.
It will not participate in production but provide support in capital, media and marketing consulting for film producers.
The fund sets a minimum income growth plan of 8 per cent per year and a maximum of 10.5 per cent per year for the 2018-2019 period, and minimum revenue growth of 10.5 per cent for 2020-2022.
Other financial benefits for investors include the right to buy preferred stocks at the time of issuance, as well as stock value expecting to climb at least five-fold on the initial investment after three years. Its goal is to invest in an average of 20 film projects each year.
VEF will look at an initial public offering (IPO) five years after its establishment.
The Vietnamese movie industry is estimated to generate a revenue of VND2.3 trillion ($98.9 million) per year with a growth rate of 25 per cent, according to a report.
The movie and entertainment scene in Vietnam has witnessed quite a few deal-related developments in recent months. South Korea’s largest multiplex cinema chain CJ CGV aims to list its Vietnamese arm CGV Vietnam on the Korean Stock Exchange to raise fresh capital to strengthen its leading position in the Southeast Asia market, Korea’s Pulse News reported.
Earlier, Vietnam-based media company Phuong Nam Cultural JSC proposed to sell its 12.5 per cent stake in CGV Vietnam, which operates the country’s largest multiplex cinema, CGV to real estate developer Black Diamond Investment JSC.
Yeah1CMG, a shareholder of VEF, is a subsidiary of DFJ VinaCapital-backed entertainment group Yeah1 which was traded in Ho Chi Minh City Stock Exchange at the reference price of VND250,000 ($11).
According to a report on Dealstreetasia