HSBC is introducing a so-called HSBC Asian Ventures Syndicate to make private equity investments in small to medium sized technology-driven businesses in Asia, with a particular focus on China, Taiwan, South Korea, and Japan.
The Syndicate has been set up to invest in the HSBC Asian Ventures Fund 2 Limited advised by HSBC Private Equity Technology Limited, a wholly owned subsidiary of HSBC Private Equity (Asia) Limited.
The sectors that have been singled out as having the potential to deliver high growth in revenue and profit include: communication and wireless products, software applications, information technology products and services, and internet related applications and services.
HSBC Republic Investments Limited, the distributor of the fund, notes demand for information technology products and services to upgrade existing infrastructure and systems in Asia; Asia’s competitive cost structure, especially in skilled labour, that is driving an outsourcing trend for technology services from companies in more developed markets; the presence of highly developed clusters of activity in certain technology sectors in China, South Korea and Taiwan; the often lower valuation multiples in Asian stock markets as compared with Europe and the United States; the recovery in recent years of regional capital markets and increasing regional merger and acquisition activity that may lead to attractive exit opportunities over the life of the Fund; and Asia’s position as an established manufacturing base for technology products.
The minimum commitment for investors in the Syndicate is US$ 250,000 and the target Syndicate size is US$40million. The initial closing will be on 28 February 2005, when the fund is expected to close with committed capital of US$80million.
“The Syndicate offers long term investors an opportunity to capitalise on a specialist market in Asia,” says Jamie Murray, Head of Marketing, HSBC Republic Investments Limited. “HSBC’s Asian private equity operations started in 1988 has a proven investment strategy in the region and is well placed to achieve a strong investment performance. The Fund’s dedicated team will aim to exploit opportunities existing in Asia to provide investors with a steady return on their investment.”