China Everbright, IDG acquire Shanghai Film Art Academy

The deal was structured through the firms’ $3bn M&A investment fund, launched just two months ago.

State-owned financial conglomerate China Everbright Limited (CEL) and San Francisco-based venture capital firm IDG Capital Partners have acquired a controlling stake in arts college Shanghai Film Art Academy for an undisclosed sum.

The deal is part of the firms’ plans to develop local talent in the Chinese film and television industry, with an eye toward bringing home-grown entertainment to international markets.

The investment came from the IDG-Everbright M&A Investment Fund, a $3 billion buyout fund jointly launched by the two firms in June this year, which will invest in Chinese companies seeking overseas expansion.

The Shanghai Film Art Academy is located in the city's Zhangjiang Hi-Tech Park, commonly known as China's Silicon Valley. The arts institute is certified by the Chinese Ministry of Education, the Ministry of Culture, and the Shanghai Municipal Government, and offers 15 specialist fields such as film, animation games, and digital design to around 3,000 students.

The Shanghai academy recently teamed up with the New York Film Academy to offer courses for international students, starting in September. It has also inked an agreement with the Venice Film Festival and ANICA, Italy’s film industry association, for collaborations with China’s film and audio visual industry.

The investment from CEL and IDG Capital will be used to turn the Shanghai academy into the leading film and television incubator in China that will groom local filmmakers, acquire independent film companies in Hollywood, and partner with European film schools and companies.

China today is the fastest growing film market worldwide, with box office revenues expected to reach CNY 200 billion ($30 billion; €27 billion) in 2020, compared CNY 44 billion in 2015, according to a Deloitte report. Developments in the entertainment industry in recent years such as the Chinese government’s push for “Made in China” entertainment, the growth of the internet, and capital injections from tech investors such as Baidu, Alibaba, and Tencent, have led to the rapid growth of the film industry.

August has been a busy month for CEL, the asset management and investment banking arm of Hong Kong-based enterprise China Everbright Group. The firm launched a $750 million technology, media and telecommunications (TMT) fund alongside Chinese media advertising agency Focus Media, and also held a $264 million first close on its Global Investment Fund, which is targeting $500 million.

The TMT fund will invest in internet-based Chinese companies, while the Global Investment Fund targets US and European companies that want to expand in China.

Early last month, China-focused IDG picked up a 20 percent stake in French football team Olympique Lyonnais for €100 million. In July, it announced a $1 billion fund in conjunction with Silicon Valley venture capital firm Breyer Capital to invest in growth-stage companies in China as well as those looking into the country.