Majority of VEIL investors rush to exit in oversubscribed tender

Nearly 70% of Vietnam Enterprise's shares were submitted in its first tender, greatly exceeding its 10% cap.

Vietnam Enterprise Investments (VEIL) has revealed strong demand for its first tender offer, with shareholders seeking to exit more than two-thirds of the trust’s outstanding shares. 

The £1.4bn Dragon Capital-managed fund shared on Friday that 109.7m shares, equivalent to 68.1% of the share register, were put up for tender. 

With the offer capped at 10% of issued capital, it was oversubscribed nearly sevenfold. 

To manage the excess, shareholders who tendered more than their basic entitlement – up to 10% of individual holdings – will be scaled back, with only 1.58% of shares above that level accepted. 

The tender was first announced in December after more than 20% of shareholders voted to discontinue the trust at VEIL’s annual general meeting.

While the proposal to wind up the trust was ultimately defeated, the board consulted investors and identified some demand from shareholders for an exit opportunity, who felt ‘constrained’ from selling on the secondary market given the trust’s considerable discount. It currently trades 10.1% below its net asset value (NAV), but has sat on an average discount of 17.9% over the past year.

The board has signalled it may consider two further tenders of the same size over the next 12 months. It feels a series of smaller tenders will help minimise disruption in Vietnam’s relatively illiquid equity market.

Of the shares tendered last week, 83.2m were submitted under the ‘cash exit’ option, while 26.5m were tendered under the ‘in specie’ option – allowing qualifying professional clients to reinvest proceeds directly into underlying portfolio assets or an open-ended fund run by the VEIL’s manager.

The tender price will be set at a 3% discount to adjusted NAV as of 16 January 2026, with payments expected around 21 of January for cash exit shares and 22 of the month for in specie transfers.

Shares in VEIL have marginally outperformed the Association of Investment Companies’ country specialist sector over the past three and five years, and over the past 12 months, the trust returned 41% versus the 23.5% sector average.

The tender forms part of broader efforts to address the trust’s discount,  alongside an active buyback programme which saw 16.3m shares repurchased in 2024 and 23.7m in 2025 to the end of December.