Asia Watch, Nov. 6, 2006

Xilinx launches $75M tech fund aimed at Asia

U.S. chipmaker Xilinx Inc. has launched a $75 million corporate venture capital fund to boost innovation in the programmable logic device market in the Asia-Pacific region.

The Xilinx Asia Pacific Technology Fund is considered the largest corporate capital fund based in Singapore. The fund will invest in companies in China, India, Taiwan and Korea.

San Jose, Calif.-based Xilinx established its overseas headquarters in Singapore two years ago to plug into the semiconductor growth in Asia.

Hans Schwarz, vice president of business and strategy development, said that the Xilinx fund will look at early stage companies in wireless communications, wired networking, broadcast video, medical and other industrial kinds of systems. “The innovation we see throughout Asia has heavy consumer content and we’re hoping to capitalize on the innovation that’s going on throughout Asia,” Schwarz told the Channel NewsAsia website.

Potential investments could range from $500,000 to $5 million. Schwarz said that the company is projecting a 15% internal rate of return from the investments.

The company has already committed about $2 million in an undisclosed Indian design services firm.

Arrest warrant sought for KEB president

South Korean prosecutors investigating the U.S.-based Lone Star Fund’s takeover of Korea Exchange Bank (KEB) at an allegedly below-market price said last week that they have sought an arrest warrant for a former president of the bank for his involvement in the deal.

Lee Kang-won, 56, was charged with bribery and breach of trust and bribery, prosecution officials said.

Also, prosecutors have requested an arrest warrant for Lone Star Vice Chairman Ellis Short, according to one South Korean news service.

KEB and Lone Star have been under criminal investigation since early this year over allegations that former KEB executives deliberately inflated the bank’s debts and losses before it sold.

Dallas-based Lone Star acquired 64% of the bank from the Korean government in 2003 for about $1.4 billion and has been working to complete a sale to Kookmin Bank.

Upstream eyes tech startups

Singapore-based Upstream Ventures has launched an $80 million fund focused on early stage tech companies in Singapore, China and India.

Managing Director Carmelo Pistorio, based in Singapore, says that the new fund, Upstream Asia Enterprise Fund, will capitalize on the gap for early stage funding and on the growing appetite for Asian private equity.

“We will tap into the empty space between how far up angels and how far down venture capitalists are willing to invest,” Pistorio says.

Oak Pacific buys social networking siteOak Pacific Interactive, a China-based provider of Internet products, has agreed to buy, a Chinese social networking site for college students. Xiaonei, which has been likened to the U.S.-based Facebook for its youth appeal was founded last year and boasts more than 500,000 members.

Oak Pacific plans to merge Xiaonei with its existing college-oriented website No financial terms were disclosed. Oak Pacific has raised nearly $60 million in VC funding from Accel Partners, DCM-Doll Capital Management, General Atlantic, Legend Capital and Technology Crossover Ventures. —PE Week staff