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Paradigm: Bringing to bear private equity and venture capital expertise in Greater China
08/14/2016
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Over the last several decades, entrepreneurs in Taiwan have created an enviable high-tech, value-added manufacturing base which provides abundant private equity and venture capital investment opportunities throughout Greater China. Taiwan has excelled in the low-cost and high-quality production of Electronics, Semiconductors, Communications Systems, Computers, Optoelectronics, Components and PC Peripherals, to name but a few sectors. This efficient production relies on the accrued and growing arsenal of intellectual property and know-how often referred to as “innovalue." One often-quoted statistic which highlights innovalue, states that Taiwan designs and manufactures over 60% of the world’s notebook PCs. Other similarly robust statistics are applicable.


Taiwan leads the world in foreign direct investment into Mainland China, reaching a cumulative US$68 billion over the last ten years. Taiwan accrued a  US$188.5 billion trade surplus in  2015 with Mainland China. This trade surplus represents the dynamic interaction between Taiwanese businesses investing in the Mainland, and said investees buying capital equipment, key components, and modules and other products and services from Taiwan. 


More recently, Taiwanese have expanded this winning model exponentially into Mainland China. This on-going expansion with China has created a synergy -- that is, a “sum-is-greater-than-the-parts” network effect. The resulting “coalition” of Taiwanese and Chinese parties is trumping competing high-tech manufacturing giants like Korea and Japan. This is a direct result of innovalue and of Taiwan’s ethnic “home court advantage.” Not only does this coalition of Taiwan and China manifest itself with R&D in Taiwan and mass production in China, but also the network effect encompasses a growing and mutually-beneficial expansion of R&D and higher value-added into China itself, under the tutelage of experienced Taiwanese firms. 


Without question, Taiwanese entrepreneurs, investors, and managers dominate China’s burgeoning high-tech manufacturing industries, providing high-end value add and know how to complement China’s low-cost manufacturing acumen. Taiwanese are galvanizing China’s high-tech manufacturing prowess with high-end equipment, key components, and related services and expertise. As such, Taiwanese have become indispensable to China’s development. Linkages between Taiwan and China are bound to grow stronger naturally as these trends continue. Further accelerating these trends is the entry of both areas into the World Trade Organization.


The General Partner intends to exploit these ethnic Chinese conduits to uncover private equity and venture capital opportunities in Greater China.


Western-style management and culture

PVP has successfully managed venture capital and private equity funds in Taiwan pursuant to an innovative, transparent, Western management and investment decision-making process. The vast majority of direct investment, private equity and venture capital investment vehicles in Asia generally and in Greater China specifically were held hostage to the dominance of one key “general partner” interest either personal or corporate. Founded by strong team of industry insiders, Paradigm was inculcated with a cultural dynamic and regulatory structure that prevented domination and stressed an open, transparent, and ROI-driven investment process. PVP will continue to utilize this investment and management process into the future.


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