AVCJ

CMC raises $950m for third China fund

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CMC Capital Partners, a Chinese private equity firm set up by Ruigang Li (pictured), formerly president of Shanghai Media Group (SMG), has closed its third US dollar-denominated fund with more than $950 million in commitments.

The final close takes CMC's total assets under management past the $2.5 billion mark. The firm raised $350 million for its debut US dollar fund in 2014 and followed up with $600 million for a successor vehicle in 2017. There are also two renminbi funds, each of which has a corpus of around RMB2 billion ($285 million), according to AVCJ Research's records.

CMC said in a statement that its first US dollar fund returned its full paid-in capital to investors – achieving distributions to paid-in of 1x – in 2019. In all, the firm has made more than 50 growth-stage investments since its inception in 2010. Fifteen have been fully or partially exited, including eight IPOs.

The IPOs include: movie theater operator IMAX China, video streaming platforms iQiyi and Bilibili, news aggregation platform Qutoutiao, English language online tuition business Liulishuo, movie ticketing provider Maoyan Entertainment, and apartment rental platform Danke.

The LP base for Fund III is much like that of its predecessor, featuring public pension funds, sovereign wealth funds, insurance companies, financial institutions, endowments, fund-of-funds, and family from across the globe. A US regulatory filing from earlier this month indicated that $153.5 million had been raised from six investors, though not all LPs are obliged to disclose their involvement.

The investment mandate is also largely unchanged. Having started out as a media sector specialist, CMC now targets companies – based in China or with a strong China growth angle – across the media and entertainment, technology, and consumer spaces. Sub-sectors range from film and television to supply chains and logistics. The firm has 20 investment professionals with a blend of investment and operational experience located in Shanghai, Beijing, and Hong Kong.

"The decision to invest in a new subsector is not an opportunistic one, it is backed by strong conviction established through long term coverage and monitoring of the developments in the sector," said Li. "As to our portfolio companies, CMC Capital plays more than just the role of a financial investor, but our unique platform is always ready to support the company in every important stage in their development."

Existing portfolio companies include video-sharing platform Kuaishou, Mango TV and Star TV, music streaming service NetEase Music, online trucking platform Manbang Group, education providers Gaosi Education and Zhangmen, Hollywood talent agency Creative Artists Agency (CAA), fresh producer suppliers Meicai and Hongjiu Fruit, and Formula E Holdings, the official promoter of the FIA Formula E Championship. 

The firm also has a separate unit – CMC Holdings – that is designed to hold assets beyond a 10-year horizon. It is perhaps best known for investing in the holding company of Manchester City Football Club and Hollywood production house Imagine Entertainment, as well as for developing entertainment complexes in conjunction with Hong Kong's Lan Kwai Fong Group and DreamWorks Animation.

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