Investors chase venture capital firms

Venture capital companies are returning to the center of investors’ attention, as these firms ride a wave of expectations that they will finally reap results after recent growth in the initial public offering market. The stock price of KTB Network Co., which is listed on the Korea Stock Exchange, rose 8 percent yesterday from its close last week. The firm benefited from the news that Pantech and Curitel Communications, Inc., a mobile handset maker, passed the review of the Korea Stock Exchange for listing. KTB Network bought 21 percent of Pantech and Curitel, or 23 million shares, at 590 won (50 cents) per share. Market analysts predicted the stock will be priced around 1,890 won to 2,310 won per share, which would bring KTB as much as 30 billion won in profit. Hanmi Venture Capital Co., Woori Technology Investment Co. and Dongwon Venture Capital Co. all rose once last week by the daily ceiling of 12 percent and are on a steady increase. Companies they invested in are expected to float shares in the second half of the year and thus bring profit, investors predicted. Hanmi and Woori are stakeholders in Knowledge Plant, Inc., which runs one of the leading Internet portals, Empas. Hanmi holds 410,000 shares in Knowledge Planet; Woori holds 450,000 shares. Knowledge Plant, Inc. plans to receive the preliminary review on Aug. 27 for listing on the Kosdaq market. On the over-the-counter market, Empas is traded at around 28,000 won per share. Hanmi and Woori bought Empas at 1,500 won to 1,800 won. Dongwon Venture Capital has stakes in MCS Logic Inc., an integrated circuit chip maker that was listed on the Kosdaq last month, and in Nano Hitec Electronics Co., which is scheduled to go public in early October at the latest. With technology stocks peaking in 2000, the number of venture capital companies shrunk and their total investments contracted in concordance. “Venture capitalists suffered much in the aftermath of their blind investment before the bubble burst. They seem to put money into any company with a name like ‘optic, bio, or linux,’” said Kang Min-gyun, president of JKL Partners, a corporate restructuring firm. Venture capitalists’ losses lingered until the end of last year. A breakthrough came in May with the Webzen boom. Investors flocked to get their hands on the computer game maker’s stock when it went public, and since then newly listed companies have attracted investors. “There are signs that investments of our members will revive, buoyed by indicators that the economy may turn around in the latter half of the year,” said Lee Gyeong-ho of the Korea Venture Capital Association. There are about 20 active venture capital companies, according to Jo Gyeong-hun of Woori Technology Investment. by Kim Joon-sool