Societe Generale (SG) is launching a fund - Asia e-business - which seeks high capital growth by investing in existing Asian companies which are using Internet-based technology to enhance their profitability and shareholder value by reducing operating costs and increasing their revenue streams. The fund invests in companies using Internet technology to improve internal business processes, business relationships, the buying and selling of goods, services and information between businesses and from businesses to consumers. 'We are launching this in the United States, Europe and Japan. We strongly believe that the phenomenon that has happened in the US will go the same way in Asia and will provide high returns at the end of day,' Daniel Truchi, SG's private banking managing director for Asia, said. He said SG carried out a great deal of research and placed emphasis on the timing of investing. The investment team screened all stocks to identify companies which operated within one or more of five e-business models. The models included infrastructure provider businesses such as cable TV operators, commerce involving financial service providers, transportation and consumer goods, content providers such as entertainment, software which refers to application solution providers such as IT consulting and auxiliary services such as logistics, corporate services, marketing and other service providers. Asked about the recent meltdown in technology stocks, Mr Truchi said what happened was a result of strong growth which was bound to be accompanied by volatility. 'We have to be careful in analysing those stocks as it is natural for them to move strongly in new economies,' he said. Mr Truchi believes that the Asian e-business sector stocks have slowly but surely outperformed mainstream Asian stocks by more than 200 per cent and compared favourably against both mainstream Asian stocks and US e-commerce stocks in terms of risk and return. He said SG, which managed funds for a number of major customers, had a proven track record. The assets under management by its private banking arm in Asia had doubled last year. 'We have to closely monitor the customer requirement trends and those requirements are changing rapidly,' Mr Truchi said. He said the changes include product quality and product technology becomes the key factor. Wealth management has evolved from the preservation of capital for traditional customers to the new ways of doing business by entrepreneurs who are reacting quicker to market changes. According to some research companies, the total wealth of the Asian customer market has been growing rapidly and shows that their assets are also growing fast. In fact, much faster than in other countries. Asked about the impact of the Asian crisis on banking, Mr Truchi said it had eliminated a number of niche players which, in turn, had led to the emergence of several larger and more professional private banking houses, such as SG. He expects more mergers and acquisitions in the banking industry in the near future. Wong Joon San