KKR looks to triple Vietnam investments in next decade

Bloomberg

KKR & Co expects to at least triple its investments in Vietnam in the next decade as it seeks to capture rising demand from the Southeast Asian nation’s growing middle class.
The US buyout firm’s investments in Vietnamese assets crossed $1 billion after a KKR-led consortium bought a stake in Vinhomes JSC, the largest real estate developer in the country, according to Ashish Shastry, co-head of private equity for KKR Asia Pacific and head of Southeast Asia.
The Vinhomes deal is KKR’s biggest in Vietnam since the private equity firm started investing there in 2011, he said.
“Our investments there could triple or quintuple in the next decade.”
Vietnam is one of the fastest growing economies in Asia, even as the coronavirus pandemic threatens to drag its gross domestic product growth below 6% in 2020, for the first time in six years. The country has become an alternative manufacturing hub to China, following rising tensions between the US and the world’s second-largest economy. Vietnam will be a beneficiary of a shift in supply chains arising from the trade disputes, Shastry said.
“The Vietnam story is exciting given its young and growing middle income group,” Shastry said. There were 24 million middle income and affluent people in Vietnam in 2017, according to Boston Consulting Group. They estimate that by 2030 that figure could nearly double.
Shastry said the number one aspiration for the middle income class in Vietnam is housing. The penetration of modern types of housing, such as apartments, in Vietnam’s major cities is about 10%, he said, adding that it is at an inflection point similar to China 20 years ago. “We want to catch this wave,” he said.