Businesses.com.au
A+ R A-

YPO business leaders

The True Cost of Capital: People



On a visit to rural Vietnam a few years ago, Don Lam met with a mother who had just lost her 8-year-old daughter to a heart condition because she did not have the money for surgery. When he discovered that it would have cost USD3,000 to save her, Lam decided to act.

 

As the founding partner of Vina Capital, one of Vietnam's leading asset management groups, Lam adopted an attitude of giving back to the communities in which he works. He has taken mainstream financial regulatory requirements of ethics, transparency and fairness, and applied them to a social business model that promotes good.

 

"If we're going to invest in the community then we should start giving back to the community," says Lam, a member of Young Presidents’ Organization since 2010.

 

The latest venture the Lotus Impact Fund started in 2013 is effectively an impact investment fund. Lotus Impact actively invests in private enterprises that help solve social and environmental problems. Projects that produce catering graduates, business graduates for rural economic growth and clean-water projects are funded through a process that merges local market knowledge with financial and social analysis.

 

"We focus on high social intent but not necessarily a high return," explains Lam. "The measure of social impact is more important to us."

 

Vina Capital's investor base is mainly in Europe, where investors admire the positive developments Lam has introduced. "Many of our investors visit us and say they want to become involved," says Lam. "They tell me that if they're looking at two funds, both being equal, they'd choose us because of our social impact."

 

With a succession of global financial crises behind us, Lam has sage advice for how we should view money, "as a tool to create stability in whatever you do. The money we generate should be looked at from a wider investment perspective. Not following traditional finance trends and focusing beyond short-term profit can result in better profits down the line."

Lam believes that the key in business is to lead by example. "You can talk as much as you want but if you don't actually do it yourself then it won't have any effect."

 

Lam's Investment Check List:

 

  • The first thing Vina Capital does is look at the people they are investing in, not the industry. What they manufacture is less important than the people managing the business. "The people who manage the business might run a fantastic operation but if they're not ethical, it will go sideways very quickly."

  • Vina Capital looks at how companies treat the community around them. "It's important in the long term that these businesses have a sense of social responsibility."

  • They do not invest in businesses that make a lot of money by cutting corners, like in in Bangladesh or Pakistan, where factories collapse and workers are killed. "You'll make money in the short term, but the focus should be on a long-term return for your investment."

 

YPO (Young Presidents’ Organization) is a not-for-profit, global network of young chief executives connected through the shared mission of becoming Better Leaders Through Education and Idea Exchange™. For more information, visit www.ypo.org.

 

 

 

Page 3 of 21