Jean Christophe ganz


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Measuring the impact of investments remains a main challenge for sustainable finance professionals and, together with Climate Change, an overarching theme at TBLI. Sixteen related workshops offer debate on ESG and Impact Investing trends, private equity, portfolio strategy, food production, emerging markets, sustainable energy or philanthropy investing.

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  • Let’s take a look at our portfolioHere you see our current top 10 positions. To diversify the portfolio we were able to reduce our two top positions at attractive premiums over market prices. We have streamlined our portfolio from 30 positions 12 months ago to 28 today.As part of our portfolio re-balancing over the past 12 months, our top 3 investments now make up 29.7% of our total portfolio, compared to almost 37% in August of last year. We intend to reduce these two positions further over the next months. You find two new names among our top 10.Let’s take a closer look at what impact our rebalancing efforts have had on our portfolio
  • Jean Christophe ganz

    1. 1. ESG Investing in Vietnam Jean-Christophe Ganz Chairman – VietNam Holding Asset Management TBLI Conference, Zurich 15 November 2013
    2. 2. VietNam Holding (VNH) Investment Value investment approach Themes Long-term growth megatrends Class Domestic Consumption / Agri-Business Listed / OTC Equity Portfolio of mid-cap leaders with superior EPS growth Single Investment 10% max. Dynamic portfolio management Single Industry 30% max. Seven year performance track record Portfolio Companies Experienced local team 25 Listing IPO June 2006 London (AIM) VNH:LN Frankfurt (Entry Standard) VH1:GR Market Capitalization Net Asset Value Share Price Discount to NAV Sources: Bloomberg, VNHAM. 8 November 2013. USD 76.3 M USD 106.2 M 28.2% 2
    3. 3. Vietnam Country Profile Population 91.5 million - 13th largest Transition economy - 10+ year lag to China Demographic dividend - Median age 27.8 yrs Labor education - Literacy 94% Resources - Minerals, Oil & Gas, Tourism etc. Homogenous population - 85.7% ethnic Kinh Trade stability - ASEAN+3 Maturing stock market - Since 2000 Located in the center of East Asia and South-East Asia, Vietnam is one of the world’s fastest growing markets Sources: IMF, GSO, HSBC, EIU, CIA, US Census Bureau / December 2012. 3
    4. 4. The ESG Investment Challenge in Vietnam No ESG rating agency covering Vietnamese equities Most fund managers are local players with limited ESG sensitivity Environmental damage in Vietnam still relatively low, yet increasing quickly Corporate ESG awareness, investor & consumer pressure growing but still scant Environmental regulation slowly being built Poor monitoring and limited enforcement No compelling disclosure standards Bottom-up environmental awareness building Benefit of hindsight (China experience) 4
    5. 5. The VNH Approach Integrate ESG criteria in investment analysis Combine ESG ranking with focus on financial return Actively promote sustainability and good governance practices as part of our core values Expand the VNH Forum as an ESG commitment platform with investees and government Pursue and expand a tangible social commitment through the VNH Foundation philanthropy Assumption: ESG sensitive investees show better long term performance 5
    6. 6. Integrating ESG Investment Universe Sustainable Investment 600 Listed / 1400 OTC Requirements Sound enterprise management Market Cap / Liquidity / Governance Long-term earnings Financial Analysis ESG Analysis Risk-adjusted returns Materiality Investment Selection Industry Allocation VNH Portfolio Review / Rebalance Engagement 6
    7. 7. Engagement Investee Engagement Network Leverage Engage senior management Knowledge exchange Private bilateral dialogue Resource pooling with peers ESG and financial key issues Coordinated voting & action Board member involvement Advisory Council access VNH Forum Global best practice in local context Partnership with government Audience of senior executives Public presence through local media 7
    8. 8. Portfolio Composition Industry Allocation Top 10 Holdings Health Care Construction & Materials Food & Beverage 2 Hau Giang Pharma Chemicals Oil & Gas Basic Resources Industrial Goods & Services Personal & Household Goods Automobiles & Parts 8% 17% 5 Petrovietnam Drilling 6.56% 6 Binh Minh Plastic 6.46% 7 Hung Vuong Corp. 5.78% 4.73% 4.34% 10 Thien Long Group Corp 7% 7.21% 9 Hoa Phat Group 18% 7.65% 8 Viconship 6% 7% 7.88% 3 AnGiang Plant Protection 20% 8.50% 4 Traphaco 4% 4% 4% 1 Vinamilk 3% 2%1% 0% 4.08% Telecommunications Sources: Bloomberg, VNHAM / 31 October 2013. 8
    9. 9. Outperformance NAV Performance vs. Peer Group and Vietnam Index (VNI) Performance vs. VNI USD adjusted: Vietnam Holding 41.5% PXP Vietnam 18.2% -20% Dragon's VEIL 14.4% -40% VN Equity Holding 5.7% -60% DWS Vietnam 4.1% -80% VNI USD adjusted 20% 0% Sources: Bloomberg, LCF Rothschild / 31 October 2013. 9
    10. 10. VNH Profile Differentiators Local sustainability analysis ESG value & risk management Active ownership with investees and regulators Goals Profitability and reputation of investee companies Above average returns under consideration of ESG factors Generating high risk-adjusted returns by combining rigorous financial analysis with interactive sustainability research 10
    11. 11. Contact Vietnam Holding Asset Management Ltd. Ho Chi Minh City Zurich 1202 Fideco Tower 81-85 Ham Nghi, Q1 Vietnam +848 3823 0465 Gartenstrasse 19 CH - 8002 Switzerland +41 43 500 2810 London AIM VNH LN Frankfurt Entry Standard VH1:GR Bloomberg VNH LN Equity Reuters VNHq.L ISIN KYG9361X1043 | 11
    12. 12. Appendix ESG Analysis & Engagement 1. Identify material ESG dimension 2. Analyze and assess business impact 3. Set issue priority and agree on management recommendation 4. Define performance indicators and target management milestones 5. Agree on engagement schedule 6. Monitor performance progress The Vietnam Holding (VNH) approach: • Financial & ESG Category • Dimension and Relevance Research Investment Analyst • Issue within Sector Context • Business Impact • Prioritize Issues • Management Recommendation Investment Team Valuation & Engagement • Performance Indicators • Management Milestones 12