Hollywood to Be Wooed by $800 Million Chinese Media Fund

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LONDON — The Hollywood majors and tentpole productions are among the future investment partner targets for a heavyweight Chinese media fund created by China’s Harvest Alternative Investment group and Sun Redrock Investment Group.
The $800 million-fueled private equity fund, the Harvest Seven Stars Media Fund, aims to invest in studio projects with an eye to bringing them to the wider Asian market and mainland China.
Redrock Investment Group, founded by Chinese media entrepreneur Bruno Wu, and Harvest are currently ironing out deals with “major filmmakers and filmed entertainment providers” to invest in English and Chinese language content both for Asia and with the global box office potential.
Wu, speaking on a video conference call with Hong Kong and London, said he expects to be able to detail deals with Hollywood producers and filmmakers “within the next 30 days or so.”
The fund, currently “within sight” of raising the $800 million, aims to invest in Hollywood and beyond, according to Wu. One of the main factors in investing in Hollywood output will be that the projects are “roundly acceptable to Asian audiences,” Wu said.
He cited current movies such as Paramount’s Mission: Impossible – Ghost Protocol and the Sherlock Holmes franchise from Warner Bros. as being the sort of tentpole the fund would be interested in investing in.
The fund will operate in three distinct areas – mergers and acquitisions, distribution in Asia and movie content either through equity investment in companies or operating capital investment — and aims to make its first investments in May this year.
Harvest Seven Stars Media is being advised by Creative Artists Agency’s Beijing office.
Harvest Alternative Investment Group and Sun Redrock Investment Group boast over 70 years of experience in the Chinese media and finance sectors.
Wu said the new partnership emphasizes “our confidence in the strength and potential of the Chinese media industry and the wealth of talent within it. We look forward to cultivating this new joint venture and seeing it grow into one of the world’s leading media funds.”
Harvest Alternative Investment Group’s Lindsay Wright added:  “The addition of this partnership to the Harvest Alternative Investment Group further supports our goal of developing a leading alternative product platform in China and globally.”
Hollywood players are being targeted with the promise of established Chinese media players at the fund offering them a way in to China and Asia at large and help with developing product for the market.
“The overwhelming majority of the titles released by Hollywood works in China,” Wu said. “But it doesn’t work in reverse. By that I mean big Chinese movies and stars aren’t seen as widely outside China.”
Wu said one of the ambitions would be to develop globally outward looking projects with Hollywood partners also.
Harvest Alternative Investment Group is the alternative investment arm of Harvest Fund Management founded in 1999 marking it out as one of the first 10 fund management institutions authorized by the Chinese government as part of its strategy to open up and develop its financial sector.
Sun Redrock Investment is part of Sun Media Group founded by Wu and Yang Lan operating five major divisions including Redrock Capital, Sun Enterprises Group, Sun Publishing Group and Sun Culture Foundation, a charitable foundation which promotes philanthropy and corporate social responsibility in China.

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$800 Million Chinese Fund to Back Film Projects

By MICHAEL CIEPLY

Published: February 6, 2012

LOS ANGELES — If Chinese versions of Rupert Murdoch and Oprah Winfrey teamed up with, say, China’s J. P. Morgan to start a film fund, this would be it.

Sun Media Group, founded by Bruno Wu, who is often compared to Mr. Murdoch, and his wife, Yang Lan, sometimes likened to Ms. Winfrey, is joining Harvest Fund Management to create an $800 million fund that will back entertainment ventures in China and around the world, company executives said Saturday. “The goal is pretty straightforward; it’s to make a maximum return, of course, for the investors,” Mr. Wu said of the enterprise, which is aimed at a booming Chinese market for global film. He and Lindsay Wright, the vice chairman of a Harvest global investment unit, spoke jointly by telephone.

The fund, called Harvest Seven Stars Media Private Equity, is expected to invest in existing entertainment companies. But it also will provide backing for individual filmmakers and build an entertainment distribution system in China and elsewhere, Mr. Wu and Ms. Wright said. Its initial pool of capital, they added, will probably be expanded in the near future.

Last year, the Motion Picture Association of America said it expected the number of cinema screens in China to increase to more than 16,000 in 2015 from about 6,200 in 2011, as Chinese box-office receipts grow to a projected $5 billion from $1.5 billion. At the same time, China has been under pressure from the entertainment industry in the United States to ease censorship, open its markets and crack down on chronic film piracy.

“The awareness, and urge, and strong desire to protect” intellectual property has never been higher in China, Mr. Wu said. He and others, he said, have been lobbying the Chinese government for tougher antipiracy measures.

Regarding markets, Mr. Wu said he and fellow investors are eager to ease the way in China for blockbuster-style films from abroad — one of the biggest hits there lately has been “Mission: Impossible — Ghost Protocol” — by joining in substantial co-productions.

Asked whether the venture might back a company as large as the current incarnation of DreamWorks Studios, which was built around a $325 million stake from Reliance Entertainment of India but is now in search of new financing, Mr. Wu said, “Yes.” Harvest Seven Stars is being advised by the Creative Artists Agency, through its Beijing office. Several deals with film producers are being completed, Ms. Wright and Mr. Wu said. Given the agency’s involvement and the producer negotiations under way, the new venture appears to be pointed toward a Hollywood alliance sooner rather than later.

Mr. Wu, one of China’s wealthier entrepreneurs, and Ms. Yang, long a television talk show hostess, already control a media empire with television, print and online components. The new film-oriented fund is backed by their Sun Redrock Investment Group. Harvest is participating in the new venture through its Harvest Alternative Investment Group, which Ms. Wright leads. She described Harvest as the second-largest asset manager in mainland China.

The new venture will operate from Hong Kong and Beijing, Ms. Wright and Mr. Wu said.

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