Market outlook
Vietnam entered 2025 with strong economic momentum, recording 7.09% GDP growth in 2024—among the highest in SEA. Growth was fueled by manufacturing, exports, tourism-led consumption recovery, and rising FDI & domestic investments. FDI hit USD38.2B, mainly in manufacturing, real estate, and electricity. Despite capital market volatility, investor confidence stays high thanks to solid macro fundamentals and the anticipated upgrade from Frontier to Emerging Market status. Vietnam’s growing digital economy, AI adoption and plans for International Finance Centre further reinforce its role as a regional hub for innovation and tech-driven investment.
Private equity deal recap
Vietnam’s PE market faced continued headwinds in 2024, with only 31 deals totaling USD326 million—down sharply from 2023 due to lack of large transactions. Tech led by volume, while Retail and Healthcare topped in value. Early 2025 shows renewed optimism, highlighted by Techcoop’s USD70 million Series A—one of Southeast Asia’s largest agritech deals—reflecting rising interest in scalable, tech-driven plays.
Fundraising trends
In 2024, 61% of surveyed PE managers raised funds, but 64% of them fell short of their targets. Key challenges included LPs reducing allocations to frontier markets, macro volatility, and extended exit timelines. However, the 2025 outlook is upbeat—nearly half of respondents expect fundraising to grow by over 15%, driven by improved macro conditions, stronger LP risk appetite, and Vietnam’s expected market upgrade.
Attractive industries
Healthcare, technology, and education are top sectors for PE investment in Vietnam next year, reflecting investor preference for scalable, resilient, and high-growth industries. These priorities align with shifts in consumer behavior, digital transformation, and workforce upskilling. Transportation & logistics also stay in focus, driven by Vietnam’s role in global manufacturing and rising demand for cold chain and last-mile delivery.
Valuation
Vietnam’s valuations in 2024 followed the global contraction trend, reflecting cautious sentiment among PE investors amid broader economic headwinds. However, sentiment for 2025 is improving: 94% of surveyed PE investors expect valuation multiples to rise, driven by stronger growth potential, improved macro conditions, and ongoing economic reforms. While global uncertainties and interest rate trends remain key risks, Vietnam’s solid fundamentals and policy outlook continue to support investor confidence.
Value creation plan
Survey findings show a shift in PE value creation priorities in Vietnam—from stabilization and cost efficiency (2023–2024) to growth and scalability (2025–2026). This reflects rising investor confidence in Vietnam’s macro-outlook and market recovery. Future value creation will focus on market expansion, governance, and digital transformation, replacing prior emphasis on restructuring and cash flow.
AI and Digital transformation in PE firms
AI adoption is accelerating among PE firms in Vietnam, with 82% recognizing its importance and 85% implementing or planning AI-driven tools. Data analytics and AI-powered insights are expected to reshape value creation strategies, particularly in portfolio management, deal sourcing, and due diligence. This trend signals a broader shift from operational efficiency toward technology-driven decision-making and competitive differentiation.
Exits
Exit conditions remain challenging for PE investors in Vietnam, with 64% expecting delays of a year or more due to valuation gap and market uncertainty. Despite timing concerns, return expectations stay upbeat, with over 75% of respondents anticipating IRRs above 20%. Trade sales and secondary buyouts are now the preferred, while IPOs lose appeal due to stricter listing rules and limited foreign access, reflecting a shift toward faster, more predictable exits.
