Legend Capital, a major mainland venture-capital group, said consumer-related sectors such as retail and health care still had bright growth potential and it planned to list one of its retail units next year. 'The global financial woes have brought a sea change in the markets. As a result, clothing, food, accommodation and transportation, the indispensable parts of people's lives, are the new darlings of investors now,' said Liu Zehui, senior vice-president of Legend Capital, an investment unit of Legend Holdings, which is the parent of the world's No4 supplier of personal computers, Lenovo Group. 'We are cautious amid the recession, but we are still optimistic.' Legend Capital raised its fourth fund, valued at US$400 million, in April. The fund focuses on both startup firms and companies that need growth capital to expand. To date, the fund has invested in a handful of companies that target the country's billions of consumers. 'When we underscore the consumer sector, it doesn't mean it's a trial approach,' said Mr Liu. 'I won't make an investment decision until I fully understand the industry.' Legend Capital was known as a technology-oriented venture capital group when it was established in 2001 as part of Legend Holdings' efforts to diversify into financial businesses. It has earned best-in-class accolades from investment consultancies thanks to successful deals including Spreadtrum Communications, a Nasdaq-listed chipset designer involved in the development of the TD-SCDMA mobile phone technology. It now manages four funds with a total value of up to US$700 million. 'It is the best time to fund companies that need growth capital,' Mr Liu said. 'Health care, retail and other service sectors have huge potential to grow in China.' Legend Capital's efforts to tap the consumer sector have paid dividends. Foshan Saturday Shoes, the mainland's No3 shoe retailer, has received verbal approval from the China Securities Regulatory Commission for an initial public offering on the SME board at the Shenzhen Stock Exchange. The shoemaker may launch the offering next year when the A-share market recovers, Mr Liu said. 'As a homegrown fund, we offered the portfolio companies more than money,' he said. 'They need our experiences and resources to expand.' Mr Liu, who has 10 years' experience in investment banking, said the venture-capital business requires knowledge and insight. 'An investment decision isn't taken on the spur of the moment,' he said. 'It's a lot of work, all the way from setting up a database, intensive reading of research reports and on-site checks to drawn-out discussions. You have to be awake at any time. It is hard work and being careful that make a good venture capitalist.' Venture capital investment activity on the mainland declined 12.1 per cent in the third quarter, with 99 firms receiving a total of US$787.7 million, investment consultancy Zero2IPO said. Mr Liu forecast a turnaround on the stock market next year as Beijing's stimulus package helps buoy up the economy. 'By the end of the day, the investment expansion plan will take effect, and the gross domestic product will get back on to the fast track,' he said. 'The downward spiral is likely to come to an end next year.'