Dominic Scriven is the proud owner of the Vietnamese Labor medal, an honour the 52-year-old explains is awarded by the Asian country’s communist government for “contributions, as a labourer, towards the revolution”.
It seems an unusual honour to bestow on someone whose career so clearly relies on capitalism. Mr Scriven set up an asset management company in Vietnam in 1994 and has been running it since.
It begs the question of how the executive chairman of Dragon Capital, the $1.5bn Ho Chi Minh City-based fund house, is contributing to Vietnam’s communist revolution?
Mr Scriven does not flinch at the question and quickly rattles off a list of reasons. “Long term, committed, helping to develop parts of the economy that they [the Vietnamese government] need help in,” he says.
The Briton, who wears his blond hair pulled back in a ponytail, is not exaggerating when he says he has shown long-term commitment to Vietnam, a country of 90m people. He arrived in the south-east Asian country in the early 1990s after stints working in finance in the City of London and Hong Kong, and has lived and worked there ever since.
“I went on a trip to Vietnam with some other fund managers and we drove from north to south. And by the time I got to the bottom of the country I thought, ‘Why on earth am I in Hong Kong when there is this fantastically interesting country?’
“It was pretty obvious to me the general direction in which Vietnam would go sooner or later. So I parked myself in Hanoi and went to university there for a couple of years.”
More than 20 years and three economic crises later, Dragon Capital is the largest investor in Vietnamese companies, other than the country’s government. “Vietnam is my life. Dragon is my life. It is all of our lives, so we are in there, sleeves rolled up,” says Mr Scriven, sitting in the FT’s office in London, more than 6,000 miles from Ho Chi Minh City.
When Mr Scriven arrived in Vietnam, the country was still subject to a US trade embargo. But since then it has undergone a dramatic economic overhaul and is now one of the fastest-growing countries in the region, after struggling in the immediate aftermath of the financial crisis.
The economic changes involved Vietnam opening its financial markets to foreign investors and, more recently, the launch of a large privatisation programme that will involve hundreds of companies. Last year, it scrapped foreign ownership limits on some businesses in an attempt to attract investment.
But Vietnam has also faced criticism over the challenges foreign investors continue to experience in the country and over the pace of the privatisation programme, after high-profile offerings failed to materialise or were watered down.
Mr Scriven, who collects Vietnamese propaganda art, admits there is still work to be done. “We have had a real focus on recasting the role of the state, the centrepiece of which is a really very sizeable privatisation programme, which is under way now but has quite a way to go.”
Dragon has been an early investor in many of these state-backed sell-offs. According to Mr Scriven, the fund company was instrumental in one of the first privatisation programmes, when state-owned Vinamilk, a dairy company, first attempted to attract money from non-government investors.
“[Vinamilk’s] management was quite keen to privatise so we helped them draft a template [on how to take a business public], which has now become the template for privatisation,” says the Vietnamese speaker.
Dragon became one of the first public investors in the company, which the government valued at $100m, more than a decade ago. Now fully public, the company is worth more than $9bn.
This is not the only example Mr Scriven cites of the close relationship that appears to exist between investors, businesses and the government in Vietnam. The Exeter university graduate also talks about how Dragon provides “technical assistance” to the government and central bank by offering advice on board governance or on developing asset management legislation.
Dragon recently advised the government on the development of a pension programme, culminating in new legislation in May that set out plans for a voluntary pension system that will offer citizens tax incentives to save. Dragon is hoping to launch a pension service aimed at Vietnamese savers next year to take advantage of the changes.
Mr Scriven is quick to defend himself against accusations that there might be a conflict of interest in advising the government on welfare and business reforms while potentially benefiting from any changes, or that his close relationship with policymakers could be construed as cronyism.
“Some people [ask] how you can be providing advice when you are a beneficiary. But that is why I make the point about long-term alignment of interests,” he says.
Mr Scriven is in the process of becoming a dual citizen of Vietnam and the UK, although he still visits the country of his birth regularly to see his elderly mother. In 2006 he was given an OBE, an award granted by the UK government, for his contribution to British financial services in Vietnam.
During the summer, he returned to the UK to list Dragon Capital’s flagship Vietnam Enterprise Investments fund, which has $1bn in assets, on the London Stock Exchange in a bid to address concerns about the transparency and liquidity of the product.
The fund has returned almost 16 per cent annualised over the past five years, but this drops to 4 per cent annualised over a 10-year period, demonstrating the volatility investors face in emerging markets.
Mr Scriven says now more than ever, there is a strong investment case for Vietnam, where the economy grew 6.7 per cent last year, the fastest rate since 2007. “It’s got growth. It’s got a recovery story, but it’s also got a long-term structural story.”