In 2007, after three decades with Morgan
Stanley, Gartland decided that he had seen the
future, and that it was in Vietnam. Two years
on, the boutique investment banker at Vietnam
Partners tells ai5000 his story.
Banking on Doi Moi
I was with Morgan Stanley for 28 years. Back-office stuff. I finished up by running a cost-cutting
initiative. Of course, we called it a ‘profit improvement program’. We saved Morgan about
$500 million. It was the operational risk side rather than the trading risk side, unfortunately.
When I left, in April of 2007, Morgan had just finished its best quarter ever, our stock was
at a near record high. I’m still a shareholder. In 2007, I reached the wonderful age of 55, and I
took a sabbatical. I was traveling in Vietnam, and it just struck me as an opportunity, a country
adopting capitalism. I didn’t know much about Vietnam other than the war, you know. I had
lots of friends over there. Vietnam Partners was started by Brad LaLonde and Jim Lewis, and
in 2005 they raised the first private equity fund in Vietnam, with most money coming from
Vietnamese corporations, but some coming from family and friends. I was one of those friends. I
joined in January of 2008. It seemed kind of fun. We have multiple business streams: investment
management, advisory work, principle investing, real estate. Like everyone else, Vietnam had
a real estate correction, but it’s stabilized, and there are good opportunities. Tourism is going
to grow, so resort properties are a good opportunity. It’s one of the most attractive emerging markets
out there. Political stability, human capital—there’s 85 million people there. It’s the 13th largest
country by population in the world. I’m Irish. I always thought it was about the size of Ireland.
Ireland has 4 million people. So I was wrong. Fragile infrastructure? I don’t think that’s quite fair.
It needs a lot of work, but it has come a long way. It’s not primitive by any means. I mean, in a
country of 85 million people you have 55 million mobile phones being used. They have great
internet infrastructure. Their airlines are as good as any regional carrier here. Most people
travel by motorcycle still, and yeah, it’s still communist, but the government has determined that
capitalism is the way to achieve growth. The Doi Moi reforms have allowed entrepreneurship to flourish there.
A lot of the focus has been on China, but it’s so big, its hard to navigate. Vietnam has the same
growth characteristics, but its easier to manage. A lot of the big players just aren’t in the market.
Yeah, I mean, the local markets are down 80% since their peak, more a function of inflation
issues than credit. Inflation reached 25% in 2008, but it’s coming back down. Look at it this way:
you can buy the same growth story for 20 cents on the dollar of what it was two years ago. That
creates opportunities. We like opportunities.
Art by Zina Saunders / zinasaunders.com