Crossing the Street by Andy Ho

Author:Andy Ho
Language: eng
Format: epub
Publisher: Harriman House
Published: 2021-06-01T16:29:58+00:00

Some may say that higher compensation expenses at body shops can be mitigated by raising the prices for customers. But markets, particularly developing ones like Vietnam, can only absorb so much. The partners of the Vietnam offices of some of the big-name Western law firms can command hourly rates close (if not equal) to their peers back home. That’s because their expertise cannot easily be replaced, and their counsel is valued. However, there are only so many situations that warrant such high-powered counsel, and only a handful of companies operating here that can afford those rates. For more standard, straightforward legal work, companies will turn to smaller local firms where the counsel is good and the costs more affordable.

In Vietnam, the talent pool of experienced professionals is still relatively shallow. I mentioned earlier how difficult it is to find good CEOs, and the same holds true for attorneys, accountants, and others.

Typically, in a country that is developing, the professional class is made up of foreigners and locals who had the chance to study and work overseas. Then, as multinational firms set up in a country, locals will work there and gain valuable experience in how things should be done. After a period of time, some of those locals who worked for the multinationals will be recruited by local companies looking to step up their game, or the employee will start his or her own company in a related business. This is a pattern that has been seen in China, and I would expect it to happen in Vietnam, too. However, it may take a while, as multinationals have not operated in Vietnam for all that long yet.

Another business I could classify as a body shop is hospitals. In many cases, hospitals in Vietnam become well known because of the reputation of an individual physician, or a small group of physicians. If they are not part of the hospital’s ownership, they could threaten to go elsewhere. That is exactly what we have seen with a group that specialises in in-vitro fertilisation (IVF). They practise at a leading hospital and they are always in demand. To placate their talent, the hospital’s management has limited expanding the practice (i.e., they can’t scale it up) and they always have to deal with the potential that at some point, these doctors might be made an offer from someone else that they just cannot refuse.

Now, if you are familiar with the fund I manage (or have read my previous rule), you are probably saying to yourself, “wait a minute – aren’t you one of the biggest investors in private healthcare in Vietnam?” We are indeed. But the key to our approach is investing in healthcare systems comprised of many doctors and many locations. They may not be particularly well known as individuals, but they are good, and the facilities are known to provide quality care. We are less at risk of being compromised by the whims of star players. Nevertheless, hospitals are required to take on

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.