H&Q Asia Pacific Closes Largest Pan-Asian Private Equity Fund At $750 Million.

Business Editors

PALO ALTO, Calif.--(BUSINESS WIRE)--June 6, 2000

H&Q Asia Pacific (H&QAP) announced the final closing of its Asia Pacific Growth Fund III, L.P. (APGF III) at $750 million. This most recent fund marks the largest of three successful Asia Pacific Growth Funds from H&QAP. The fund highlights the company's core competence in recognizing new investment opportunities in the Asia Pacific region. The company's investment strategy will focus on opportunities where it can acquire control through majority representation on the board or equity. The strategy is focused around leveraging H&QAP's strong management expertise to build successful portfolio companies throughout the Asia Pacific region.

With over $1.6 billion under management, H&QAP has been a presence in the Asian venture capital circles since 1985. H&QAP's third regional fund represents technology leaders focused on building and expanding the Internet infrastructure in Asia Pacific. It also capitalizes on the explosive growth potential of various related industries within countries such as South Korea, Japan, the ASEAN (Association of South East Asian Nations) and more recently, new Net economies like China and India

Recognizing the leading role Internet Infrastructure is taking in countries like South Korea, H&QAP has invested in emerging telecommunication players such as G&G Telecom Inc. With an extensive fiber-optic backbone network that it both owns and operates, G&G serves as one of the largest integrated network service providers in Korea. Additional investments in the next generation networks space include Transmedia Communications, which was later acquired by Cisco Systems in 1999 as part of the APGF III.

The company's local presence in 11 countries in Asia Pacific region and 90 investment professionals gives it an advantage in spotting opportunities earlier than its peers. For example, when the South Korean economy went through restructuring in the late 1990s, H&Q AP spotted opportunity to make some strategic buyouts.

"Our extensive experience and presence in the Asia Pacific region has enabled us to seek out the pioneers in each tech community," said Ta-lin Hsu, Founder and Chairman of H&Q Asia Pacific. "For the Asia Pacific Growth Fund III, we sought to support the explosive growth and recovery of emerging tech powerhouses, such as South Korea and Japan.

H&QAP saw a unique opportunity with the deregulation in Japan's entertainment and media sectors. With Japan being the 2nd largest entertainment market in the world, after the United States, H&QAP invested $50 million to acquire Music Channel Co., Ltd., otherwise known as Vibe, the leading Japanese pay-TV music channel with a penetration of 2.5 million households. In keeping with H&QAP's long tradition of actively building and shaping innovative tech companies, they will enable Vibe to extend their reach beyond the TV channel and into the online space by creating the dominant music portal in Japan.

Fund's activities are not limited to South Korea and Japan. Additional portfolio companies include i100, a Hong-Kong based holding company which is investing in the business-to-business electronic commerce ventures, and G-Para, the only Japanese open architecture e-commerce website that sells game software and hardware of all major game manufactures.

Recent investments include Fabrinet, a Thailand based company started by David `Tom' Mitchell, the co-founder and ex-President of Seagate Technology and Conner Peripherals. Fabrinet is looking to capture the outsourcing trend in the optical component space and also become a world-class contract electronics manufacturer with principal targets in the networking, telecommunications, data communications, office automation and mass storage industries.

About H&Q Asia Pacific

H&Q Asia Pacific Ltd., is the corporate successor to a private equity operation originally formed by Dr. Ta-lin Hsu and Hambrecht & Quist in 1985. Since the firm's inception, H&QAP has developed into one of the largest and most extensive private equity operations in Asia. Historically, H&QAP has managed 16 funds with over $1.6 billion in committed capital. While twelve of the funds are focused on investments in a specific country, the remainder invests across the region with a distinguished array of partners that range from governments to banks.

H&Q Asia Pacific Ltd., is headquartered in Palo Alto, CA with additional offices in Bangkok, Beijing, Hong Kong, Jakarta, Tokyo, Kuala Lumpur, Manila, Seoul, Singapore, and Taipei.