The Executive Yuan's Development Fund (開發基金) yesterday inked a strategic alliance with the Israeli Giza Venture Capital Fund, saying it will invest US$175 million (NT$450 million) in the US$500 million fund with the aim of boosting the local high-technology sector.
"Twenty percent of our investment will be made to re-invest [in start-ups of] Taiwanese [high-tech] companies," Lin Yi-fu (林義夫), chairman of the fund's management committee, told reporters after yesterday's signing ceremony.
The fund's committee further expects that this first-ever Taiwan-Israel partnership will generate returns of over 10 percent in the next five years, said James Ho (何俊輝), deputy secretary-general of the fund's management committee.
Yishai Klein, Giza's Singapore-based regional director in the Asia-Pacific, also estimates a double-digit return in the next five years, saying his company had consistently achieved a top 25 percent performance globally among venture capitalists.
Speaking at the ceremony, Giza chairman Zeev Holtzman lauded the partnership as a "natural match" between Israeli and Taiwanese companies, which "combines state-of-the-art technology solutions offered by Israeli start-ups with the manufacturing and marketing capabilities of Taiwanese companies."
Holtzman added that Israeli companies have shown an increasing interest in many technological areas, especially in the life sciences, biotechnology as well as medical devices, whereas Taiwan is strong in the semiconductor and electronics sectors.
Giza has been active since 1992 and became the first fund to have a presence in Asia, in 2000. Besides investing directly in Taiwan, the fund will continue to focus on early-stage Israeli and Israel-related companies in the technological areas of communications, information-technology/software and life science sectors, Holtzman said.
Given a bullish view on technological development in Asia over the next five to 10 years, "One-third of Giza's re-investments are very active in Asia," Klein said.
The venture capital firm is particularly interested in companies in the areas of emerging technologies such as the ultra-wide band sector within the communications and medical device areas, which Klein said will be profitable in the next five to 10 years.
When asked if Giza is interested in nanotechnology, Klein said that it was still too early for the company to invest since the sector may not reap profits in the near future.
To capitalize on business opportunities, he added that Giza will work with domestic venture capitalists, while extending the partnership within Taiwan by establishing ties with Taiwan's Venture Capital Fund.
Lin said the Development Fund has also proposed to establish a Venture Capital Fund of NT$100 billion, of which NT$30 billion would be provided by the Development Fund and NT$70 billion raised by the private sector to jointly promote the nation's venture capital market.
The Venture Capital Fund will be able to make direct investments in 91 venture capital firms and re-investment in at least 500 start-ups while creating 25,000 jobs, Lin said.
As of June, the Development Fund had already participated in 42 venture-capital investments, with a total value of NT$6.7 billion, while attracting NT$54.4 billion from private investment, he added.
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