Sun Media, Harvest Fund to create $800m media fund
Chinese television production firm Sun Media Group has teamed up with Harvest Fund Management to create an $800 million private equity fund that will back local movies.
Sun Media's Sun Redrock Investment Group and Harvest Alternative Investment Group are each expected to control 50% of the new vehicle, which will be known as Harvest Seven Stars Media, the Financial Times reported. It comes as Hollywood studios continue to take an interest in China's fast-growing but closed film market.
The Chinese government protects the domestic movie industry - and retains control over entertainment content - by allowing no more than 20 foreign films to be distributed within the country each year. It also forces foreign distributors to work with designated local distributors who only hand over 17% of the box office receipts.
As a result, overseas studios are looking at co-productions with Chinese film companies, which are subject to the same cennsorship restrictions but none of the distribution limits.
Bruno Wu, founder of Sun Media, and Lindsay Wright, CEO of Harvest's alternative investments arm, said that Harvest Seven Stars Media will finance co-productions such as these. In addition, it will build a platform to distribute the movies it backs in China and other promising Asian markets. The fund may also acquire some existing Hollywood firms.
Harvest Seven Stars Media plans to announce its first investment within a month and hopes to complete fundraising by the third quarter.
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