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Legend Group Launches Venture Capital Branch
Computer vendor Legend Thursday launched its venture capital branch, Legend Capital Co, which controls a sum of money worth US$100 million.
The new company will become Legend's third business pillar alongside Legend Group and Digital China, according to Liu Chuanzhi, chairman of the new firm.
"This venture capital firm is among the country's biggest in terms of size," said Liu.
Telecom network equipment, application software, information technology services and semi-conductor chip design will be Legend's investment targets.
Having grown up in the Chinese market, Legend has a deep understanding of the home market and will only invest in mainland-based high-tech firms.
The average profit return for the new firm will surpass 30 percent in the coming five years, which is higher than the 20-25 per cent return of most international venture capital companies, he said.
"We do not cater for the short term trend of the international capital market," said Liu. "Legend is going to pay more attention to long-term profits."
The total US$100 million will be separated into two phases. The company will invest the first phase capital of US$30 million before the end of next year.
Besides the mainland company, Legend Capital will set up a fund overseas to satisfy diversified investment demand, said Zhu Linan, president of Legend Capital.
His team was organized a year ago when Legend planned to separate the group into three parts.
The venture capital company began trial operations last year and invested in some software companies and telecom equipment firms, according to Zhu.
As a mainland-based but Hong Kong-listed group, Legend has advantages in its understanding of the home market and its rich experience of capital operations, he said.
Legend will take care that its invested companies attain healthy growth and will not simply seek short term profits.
He said some venture capital firms push their invested companies to go public as soon as possible in order to get their money back, which can hurt the companies' long term growth.
"Legend will never do this," said Zhu. Legend Capital will export both capital and management skills to its invested firms in order to grow with them.
Legend has held on to its top spot in computer vendor rankings in the Asia-Pacific region, according to a report from the International Data Corp.
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