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New US tech fund puts $120 million investment into Vietnam

A U.S. computer publishing giant said Friday he has launched a $120 million venture capital fund to invest in information technology businesses in Vietnam as it positions itself to become the ‘next China.’

IDG Ventures Vietnam will invest $100 million in Vietnamese IT outsourcing firms, telecommunications and software producers, and another $20 million in publishing Vietnamese IT-focused magazines, said Patrick McGovern, chairman of Boston-based International Data Group, a computer publishing, research and exposition management company.

‘It’s time now for foreign investors to be in Vietnam — or the next China — because I see a very good aspect of human resources and government awareness for the development of the private sector,’ he told reporters at the end of a four-day trip to Vietnam.

IDG’s investment in Vietnam will be 30 percent for telecom and wireless development, 25 percent for software, 15 percent for biotechnology and the rest in new material and other IT-related interests.

‘In biotech, for example, our investment will promote the use of IT products for health care and disease control in Vietnam,’ McGovern said.

IDG has selected about 40 firms to invest seed capital of between $500,000 and $4 million in several stages in the coming years with an expected annual growth rate of 30 percent to 35 percent to 2010.

McGovern said he expects the Vietnam fund will reap annual returns of 45 to 52 percent over the next decade, which is comparable to the average 52 percent returned in the last decade in China.

IDG has opened offices in Hanoi and Ho Chi Minh City, and another in San Francisco to attract investment from a large population of overseas Vietnamese. To date, Vietnam has several foreign-owned investment funds but none focus on the IT sector.

IDG will also set up several joint ventures with the government to publish Vietnamese-language magazines such as Computer World, Networking World, and Telecoms World, all of which will focus on IT content.

Communist Vietnam doesn’t allow private ownership of media. Foreigners can publish newspapers or magazines only through joint ventures with the government.

In the United States, McGovern’s IDG publishes Computerworld and PC World, as well as a popular line of how-to books that includes ‘Internet for Dummies.’