SHANGHAI (Reuters) - Chinese telecom equipment maker ZTE Corp will set up a 1.2 billion yuan ($180.38 million) fund to invest in private technology, media and communication start-ups and diversify its business.

ZTE and other investors will set up the Suzhou Partnership fund to invest in shares, equity or assets of firms with good growth potential, "enhancing the competitiveness of the group's main business," ZTE said in a statement late on Wednesday.

ZTE will control about 25 percent of the fund, while 75 percent will be owned by other investors.

The Chinese tech giant saw first-quarter profit rise 16 percent despite an ongoing U.S. probe into allegations the firm broke sanctions against Iran by shipping millions of dollars worth of American-made hardware and software to the country.

(Reporting by Adam Jourdan; Editing by Stephen Coates)