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SEAF Blue Waters Growth Fund

Established in May 2007, the SEAF Blue Waters Growth Fund (BWGF) is a commercial investment fund that provides growth capital combined with strategic and operational support to small and medium enterprises (SMEs) in Vietnam. The fund provides long-term investments with a double bottom line mission: to promote socially responsible economic development in Vietnam while generating a competitive return to the fund’s investors.

In the early 1970s, the Vietnam War destroyed much of the country’s economy. When the newly formed Vietnamese government reestablished stability in the war-torn nation, it created a planned economy, and by 1986 it had introduced significant economic reforms with free market elements. The new economic policies encouraged private ownership in industry, commerce and agriculture, and from 1990 and 2005, Vietnam was one of the world’s fastest growing economies.

SMEs in Vietnam constitute a large part of this growing economy, with 350,000 small enterprises representing 97% of registered businesses. These SMEs contribute over 50% of GDP and account for 55% of investment by businesses in Vietnam. Perhaps most importantly, SMEs create over 500,000 new jobs for Vietnamese workers each year and their growth rate is over twice that of state-owned enterprises.

Despite this growth, Vietnam remains a relatively poor country, lacking sufficient sources of capital to meet a growing demand for financing among the country’s SMEs. BWGF is meeting this demand, providing a hybrid between traditional banking and an equity-oriented venture capital approach, adapted for local markets and legal systems. The fund seeks to enhance the business performance of its investments by providing demand-driven operational and management support. Investment will be made in existing SMEs with positive cash flows, healthy operating and profit margins, and high growth potential. Currently BWGF counts among its investments two chains of healthcare clinic, an agricultural machinery manufacturer, a kindergarten chain, a leading system integrator and a leading sports equipment retailer.

SEAF Blue Waters Growth Fund Placeholder
SEAF Blue Waters Growth Fund

Region: Asia

Location(s): Vietnam

Start Date: May 2007

Status: Fully Invested

Committed Capital: $25 Million

Investor(s): Netherlands Development Finance Company (FMO); Swiss Investment Fund for Emerging Markets (SIFEM); Norwegian Investment Fund for Developing Countries (Norfund); Finnish Fund for Industrial Cooperation (Finnfund)