Oriza, Tencent, Alibaba join CMC investment platform
Oriza Holdings, Tencent Holdings and Alibaba Group have jointly committed RMB10 billion ($1.6 billion) to CMC Holdings, a new investment platform launched by Ruigang Li, founder of Chinese media-focused private equity firm CMC Capital Partners.
CMC's investments will be now managed by two different entities. While short-term financial-driven investments will be managed by CMC Capital Partners, a number of long-term strategic investments will be structured under the CMC Holdings umbrella.
The firm has already announced some deals that are not necessarily suited to the limited lifecycle of a traditional private equity fund. For example, DreamCenter, a Shanghai-based entertainment complex developed by CMC, Hong Kong's Lan Kwai Fong Group and DreamWorks Animation, is set to open in 2017 and then deliver stable returns over a long period. Similarly, last month CMC agreed to develop a Legopark in Shanghai with London-based Merlin Entertainments Group.
CMC, which was founded by Li in 2010, is currently raising its second US dollar-denominated media fund, with a target of $1 billion. The previous fund closed in early 2014 at $350 million, with commitments from fund-of-funds and exit corporations from the US, Japan and Australian. Before that, CMC raised a RMB2 billion local currency fund, which is now fully deployed.
The PE firm's most recent transaction is a RMB8 billion deal to broadcast matches from China's domestic football league.
This is not the first time Alibaba and Tencent have teamed up with entities within the CMC ecosystem. In August, Whaley Technology, a smart TV manufacturer founded by Li, raised RMB2 billion in funding from CMC Capital Partners, Alibaba and Tencent.
In addition, all three groups are interested in media content assets as they seek to create value chains that run the full gamut from origination to distribution. Indeed, Li recently told AVCJ that CMC is no longer interested in traditional movie and TV businesses; prospective portfolio companies must demonstrate the potential to operate along the entire value chain.
Formerly Suzhou Ventures, Suzhou-based Oriza Holdings has operations in private equity and credit finance. The firm claims to be the largest renminbi fund-of-funds in China, which has over RMB23 billion in assets under management.
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