Value Convergence, the brokerage arm of Lawrence Ho Yau-lung's Melco Group, aims to raise US$100 million for its first private equity fund to invest in leisure and entertainment projects in the mainland and Macau.
The move sought to expand the company's fee-based income because revenue from brokerage was unstable, Value Convergence chief executive Patrick Sun Ting-wah said.
Melco has already contributed US$15 million to the war chest and the brokerage is to raise funds in the second half of this year.
'The equity fund may team up with Melco to invest in projects in Greater China including Macau,' Mr Sun said, adding that Value Convergence would charge a 2 per cent management fee on the fund.
While Value Convergence's main brokerage business was already reeling from fierce competition from e-banking, Mr Sun said it would hire people to look for investment opportunities for the fund.
Mr Sun joined Value Convergence in August last year after working in investment banks including Kingsway Group and JP Morgan.
'We are looking at projects with [an internal rate of return] of at least 20 per cent,' Mr Sun said.