China Media Capital expands LP base with $600m Fund II

The Beijing-based investment firm saw strong support from existing investors but collected the bulk of the capital from new sovereign wealth funds, US pension funds and funds of funds.

China Media Capital (CMC) Partners held a final close on its second media and entertainment fund at its $600 million hard-cap, garnering most of the capital from new institutional investors such as sovereign wealth funds, US pension funds and funds of funds, Private Equity International has learned.

Unlike its predecessor CMC Capital Partners, which collected $350 million in 2013 from strategic investors such as US media companies and pension funds, Fund II had a much more diversified LP base, a source with knowledge of the matter told PEI. One such investor is the San Francisco Employees’ Retirement System, which committed $100 million to the fund, PEI data show.

Despite the broader capital base, the majority of the Beijing-headquartered firm’s existing limited partners also re-upped their commitments in the first closing, the source added.

The firm launched CMC Capital Partners II in March 2016 with a $500 million target and held a first close on $350 million in June. The firm raised $548 million in May this year, according to an SEC filing.

In parallel with the US dollar denominated fund, the firm is also raising a yuan-denominated fund with a 2.5 billion yuan ($370 million; €320 million) target.

Capital raised from Fund II will make investments in media and entertainment, internet, sports and lifestyle companies.

The firm has already deployed around a third of the fund across seven deals. Among these transactions include a minority stake in Hollywood talent and sports group Creative Artists Agency and the acquisition of Formula E Holdings, the official promoter of FIA Formula E Championship auto racing, for an undisclosed sum.

The firm is also building up its conglomerate, CMC Holdings, which eyes larger cross-border deals. The source added the firm is aiming to build out a “CMC ecosystem where it has different types of media companies in different holding vehicles. The media and entertainment fund will target investments with private equity-style return within the typical three to five-year hold period, while the holding company will buy and hold for the long-term with the possibility of assimilating the company in the future.”

CMC Holdings holds stakes in City Football Group, which owns the Manchester City football club, and also secured rights to broadcast the Chinese Super League.