Com­pe­ti­tion in the field of cul­ture in­vest­ment is go­ing to be in­creas­ingly fierce.”

China Daily (Latin America Weekly) - - Top News -

Shang­hai launched United Me­dia FOFs on Sun­day, the first fund of funds ini­ti­ated by a State-owned me­dia group to focus on cul­ture in­vest­ments.

United Me­dia FOFs — a fund of funds, an in­vest­ment strat­egy of hold­ing a port­fo­lio of other in­vest­ment funds — is fi­nan­cially backed by Shang­hai JinWin In­vest­ment Co, Ltd, an in­vest­ment plat­form di­rectly un­der the ju­ris­dic­tion of the Shang­hai mu­nic­i­pal gov­ern­ment’s In­for­ma­tion Of­fice, Shang­hai United Me­dia Group, the Ven­ture Cap­i­tal Guid­ing Fund of the Min­hang dis­trict gov­ern­ment, Shang­hai In­ter­na­tional Group and Shang­hai Pudong Devel­op­ment Bank.

In its ini­tial phase, the fund will have 3 billion yuan ($452.2 mil­lion) and it will grow to a to­tal of 10 billion yuan. The 10-year-term fund will make its in­vest­ments over its first three years.

About 60 per­cent of the FOFs to­tal cap­i­tal will go to gen­eral part­ner teams fo­cus­ing on projects in cul­ture in­dus­tries with high growth such as tech­nol­ogy, me­dia and telecom­mu­ni­ca­tions, as well as in­ter­net-based con­tent cre­ation. Forty per­cent will go to funds with clear mod­els at a sta­ble and ma­ture stage.

FOFs do not in­vest di­rectly into ven­ture projects. In­stead, they in­vest in funds that have port­fo­lios. They have been widely re­garded as a way to di­ver­sify risks while main­tain­ing a sta­ble in­come.

“United Me­dia FOFs will di­ver­sify risks through in­vest­ments in a wide range of va­ri­eties re­gard­ing growth stage, seg­ments, and teams’ back­ground, mak­ing port­fo­lios that meet de­mands for sta­ble and steady per­for­mance,” said Zhang Qian, a found­ing part­ner of the ini­tia­tive.

a part­ner in Oriza FOFs In­vest­ment Man­age­ment and in­vest­ment part­ner in United Me­dia FOFs

Wang Jipeng,

Ac­cord­ing to the Na­tional Bureau of Sta­tis­tics, the to­tal value of China’s cul­ture sec­tor in­dus­tries last year was more than 3.08 tril­lion yuan, a 13 per­cent year-on-year in­crease, and it is likely to fur­ther ex­pand in the next few years.

In China, in­vest­ments in so­cial me­dia, in­ter­net-based me­dia tech­nolo­gies, con­tent cre­ators such as pro­duc­tion teams of sit­coms, re­al­ity and talk shows, pro­gram dis­tri­bu­tion by sub­scrip­tion and game and ed­u­ca­tional pro­grams, have been ris­ing fast in re­cent years, ac­cord­ing to a McKin­sey & Co re­search re­port.

“Com­pe­ti­tion in the field of cul­ture in­vest­ment is go­ing to be in­creas­ingly fierce, and for in­vestors, knowl­edge, ex­per­tise and in­sight into the sec­tor is im­por­tant for choos­ing the right projects and funds,” said Wang Jipeng, a part­ner in Oriza FOFs In­vest­ment Man­age­ment and in­vest­ment part­ner in United Me­dia FOFs.

Wang said that as the in­ter­net low­ers the thresh­old for con­tent cre­ation and dis­tri­bu­tion, en­abling more peo­ple to enter the mar­ket, a higher ca­pac­ity to screen projects and funds with high po­ten­tial be­comes more im­por­tant than ever be­fore.

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