CMC Capital Partners closes US$600m US dollar fund

CMC’s second US dollar fund will focus on investing in online and offline media

PUBLISHED : Wednesday, 05 July, 2017, 11:46pm
UPDATED : Wednesday, 05 July, 2017, 11:46pm

CMC Capital Partners, one of China’s most influential media and entertainment investors, announced on Wednesday that it had completed fundraising for its second US dollar fund having reached its target of US$600 million.

CMC operates two US dollar funds and two yuan funds. It owns key stakes in Hong Kong’s dominant free-to-air broadcaster Television Broadcasts (TVB) and film studio Shaw Brothers, and is also a minority shareholder of Los Angeles-based Creative Artists Agency (CAA).

This latest fund will focus its investments on the media and entertainment, the online technology and media, and the events industries, following the model of CMC’s first US dollar fund, the company said in a statement.

The investors include international institutional investors from North America, Europe and the Middle East, the statement added.

“Chinese companies are playing an increasingly important role in the area in which we are operating,” said Li Ruigang, CMC’s founder and chairman, who has been dubbed China’s Rupert Murdoch.

“As in the past, we are heartened by the trust of our previous investors, and by the vigorous support of our new investors.”

Chinese companies are playing an increasingly important role in the area in which we are operating
Li Ruigang, CMC

CMC’s shareholders include Tencent and Alibaba, which owns the South China Morning Post.

Competition has become increasingly fierce for Chinese firms operating in the media and entertainment industry, both at home and abroad.

Wanda Group, for example accounts for 12 per cent of global box office spend, according to its website, and owns 1,352 cinemas around the world.

Last year, Alibaba itself said it would launch a 10 billion yuan an investment fund targeting China’s cultural, media and entertainment sectors, and create a separate cultural and entertainment group to manage its different activities in this sector.

Chinese investments overseas have not been without controversy, and in Hong Kong, CMC’s stake in TVB has generated headlines.

Speaking in Hong Kong last month, Li dismissed those who questioned his background and called him a Chinese communist.

“I sit on the board of Creative Artists Agency – no one suspects that I am going to turn Hollywood red,” he said. “But here in Hong Kong, how come some people labelled me in this way?”

Li also said that Hong Kong’s regulators should create a more welcoming regulatory system in line with global trends to attract investment.

Separately, TVB said in a stock exchange filing on Wednesday that CMC has the right to nominate two of the broadcaster’s directors.

The Securities and Futures Commission had previously raised concerns over CMC’s rights to appoint and remove TVB directors.

CMC is the single largest shareholder in TVB through its investment in holding company Young Lion, which owns a 26 per cent stake in the broadcaster.

At present, Young Lion has the right to nominate four directors of TVB.

According to Wednesday’s filing on the Hong Kong Stock Exchange website, CMC has the right to nominate two of these.

Charles Chan, the current chairman of TVB, has the right to nominate one director through his control of another holding company, Innovative View Holdings, which is also invested in Young Lion.

According to its website, TVB currently has 12 directors. These include Chan, the chairman, and Li, who serves as vice-chairman.

The SFC were also concerned that Li might not have substantial equity interest in CMC and may not be the ultimate controlling shareholder. Li strongly refuted these concerns last month.

Innovative View controls a majority of the voting shares in Young Lion, though CMC indirectly controls a majority of the total shares.

CMC also has the right to require Innovative View to sell all of its voting shares in Young Lion to a third party ordinarily resident in Hong Kong and nominated by CMC.