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INTERVIEW-Deutsche Telekom VC unit sells assets at returns above 100 pct

* Two exits at internal rate of return above 100 pct - CEO

* Says tech start-up valuations more rational now

* Says at the moment happy with 10.9 pct Scout24 stake

FRANKFURT, July 26 (Reuters) - Deutsche Telekom’s venture capital arm has sold two assets in the technology branch at returns of more than 100 percent, Chief Executive Vicente Vento told Reuters, but sector valuations had started to come down, he cautioned.

Deutsche Telekom Capital Partners was founded last year as one of Europe’s largest investment funds in technology and innovation. It has about half a billion euros available for both venture capital and private equity investments.

Cloud communication platform Nexmo, in which Deutsche Telekom Capital Partners owned a stake, was sold to Vonage Holdings Corp for $230 million in May, and Intel earlier this year bought Replay Technologies, which allows viewers to watch replays from all angles, for $170 million.

Vento signalled that valuations of start-up technology firms have fallen to what he called more “rational” levels, but a further correction was still continuing.

Thomson Reuters data showed that activity on global equity capital markets sank to a four-year low in 2016.

The value of worldwide equity capital markets (ECM) activity has almost halved so far this year compared with the same period in 2015 with levels down 46.5 percent at $280.8 billion, according to the data.

Vento said the company investigates between 1,000 and 1,500 potential investments every year and at a time when capital is cheap and competition among investors to find the next Facebook or Snapchat is high, it picks its investments “very carefully and analytically”.

“There are investors who invest in companies with a certain gut feeling. That is not what we do,” Vento said.

The fund is looking for disruptive areas such as software as a service (SaaS) or so-called cloud companies, artificial intelligence, cyber security and virtual reality companies.

The company also holds Deutsche Telekom’s 10.9-percent stake in German online classified ads firm Scout24.

“At the moment we are happy with our stake in Scout24,” Vento said, asked about speculation of a potential Deutsche Telekom exit from the company, declining to elaborate. (Additional reporting by Peter Maushagen; Editing by Alexandra Hudson)

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