Vietnam is developing fast and increasingly being viewed by some analysts as a no-brainer for investment. Recent developments suggest Warburg Pincus LLC is growing its interests in this emerging economy.

It was recently revealed that the American private equity and venture capital firm’s managing director, Saurabh Narayan Agarwal, is a new board member of Hanoi-based Techcombank, eligible to vote during the lender’s performance review of the 2018 annual general meeting (AGM), scheduled for April 13. The AGM was set to vote for eight new board members, including an independent one, and the new controlling unit for the 2019-2024 term.

His name’s entry follows a US$370 million investment agreement, struck in March of last year, from Warburg Pincus, representing at the time the largest-ever private equity investment in Vietnam. As a matter of routine in Vietnam, institutional investors place their executives on the board of directors of any company they pump money into.

Warburg Pincus did not reveal the size of its stake in Techcombank. According to local sources familiar with the transaction, capital injected amounted to a stake of less than 10%, with the American firm becoming one of the bank’s biggest shareholders. Following the deal, the bank raised up to US$922 million last April via institutional investors in an IPO priced at the top of its marketing range, valuing it at US$6.5 billion in total, making the bank Vietnam’s second-largest listed lender, ranking below state-controlled Vietcombank.

The firm has an average investment period of around five years to seven years, typically invests as a lead investor in transactions, and takes a seat on the board of its portfolio companies.

The boom in banking and financial services undoubtedly furnished Techcombank’s appeal, buoyed further by Vietnam’s impressive economic growth, with a buoyant economy notching up record expansion rates over recent years. This March, the lender’s chairman Ho Hung Anh, first appeared in the 2019 Forbes list of billionaires, with his total assets reaching US$1.7 billion.

“The Vietnamese economy and the banking sector are experiencing tremendous growth right now,” he said last year when commenting on Warburg Pincus’ strong interest in his bank.

The US firm’s total financial commitment to the country already exceeds US$1 billion. Its Vietnam portfolio includes Vincom Retail, the mall operator of Vietnam’s biggest conglomerate Vingroup, and VinaCapital, where Vietnamese-born former German Vice Chancellor Philipp Roesler now chairs the advisory board of VinaCapital Ventures, the group’s technology investment arm.

Saurabh Narayan Agarwal was already on Techcombank’s list of candidates for voting, and is also a director at MOMO Payment Services, a leader in the fintech ecosystem in Vietnam, where the vast majority of consumers remain unbanked or underbanked.

In this environment, fintech is making waves, sweeping through the traditional economy. According to the World Bank, only 40% of Vietnamese adults had a bank account in 2017. MoMo is one of the local companies targeting the remaining 60%.

Elsewhere in Vietnam, local reports indicate Warburg Pincus is making moves towards taking over integrated resort The Grand Ho Tram, a sprawling complex of hotels, villas, condominiums, a golf course and casino.

This complex, situated about three hours by bus or car from Ho Chi Minh City, has a total investment cost amounting to US$4.2 billion. An amount of US$1.1 billion was deployed in the first phase of the development, including hotel and resort facilities launched in 2013, and a golf course designed by golfer Greg Norman, which opened the following year.

Under Vietnamese law, the complex’s casino is only allowed to serve foreign players. But the scheme hopes to be part of a pilot project that will allow locals to gamble in Vietnamese casinos, rather than flocking overseas to casinos in neighboring Cambodia or Macau.

Various companies, including Asian Coast Development Ltd., the parent of The Grand Ho Tram, and Nam Hoi An, backed by Macau-based Sun City, have been seeking government approval for a pilot programme allowing gambling by local Vietnamese punters.

During the pending period before any potential change of policy, permission has only been granted to a casino operator on Phu Quoc Island, located off the southern province of Kien Giang, operating a scheme with a pilot duration of three years from 2019. Permission is set to be granted to another casino operating on the island district of Van Don in Quang Ninh province bordering China.

If Warburg Pincus complete the acquisition deal, it will join the long list of international hotel operators that are capitalizing on Vietnam’s bustling tourism industry. In recent years, overwhelming numbers of Chinese and Russian tourists have flocked to Vietnam’s shores (among many other foreign holidaymakers).

Consequently, the number of international hoteliers has mushroomed, with recent additions including: the Mandarin Oriental, Moevenpick, Melia and Innside in Ho Chi Minh City, Ramada Kahuna Ho Tram Strip as part of The Grand Ho Tram, and the Best Western Premier in Quang Binh and Cam Ranh.

The Ranh peninsula - made famous years ago as the largest American military base in Vietnam - houses The Anam, one of the country’s most compelling coastal resorts. Another favourite tourist spot, Quang Binh, is home to the world’s largest cave system, Son Doong.