Vanguard launches content fund

Looks to raise $100 mil for film and TV projects

HONG KONG -- Asian fund management group First Vanguard Assets intends to put together a film and TV content investment fund in partnership with veteran Hong Kong producer Raymond Wong Pak-ming.

Vanguard announced on Monday that it is aiming to raise $100 million, which it will deploy toward films and programs for the China market.

Wong, who recently produced martial arts hit "Ip Man" and was until recently chairman of Mandarin Entertainment, will be the fund's investment advisor and executive producer of the films it backs. Mandarin, recently renamed China Mandarin Holdings, is not involved, though Wong remains a board director.

"Raymond is unique in that he has always been indentified with family-oriented films. These are what work best in China and are most straightforward in terms of (regulatory) approvals," Richard Yin, founder and chief investment officer of First Vanguard, told The Hollywood Reporter.

"We expect the fund to close quite quickly, possibly by the end of the year, as we have already lined up most of the projects, their producers and distributors," Yin said. He said that the fund had already identified 10 movie projects and a TV series and that in each case returns from beyond the Asian region are only a small component of the investment calculations. The pictures are likely to be made with dual Mandarin- and Cantonese-language versions.

"The Chinese film industry is reaching a critical mass. Prospects are improving all the time due to the increasing number of cinema screens," said Yin, who was previously president of film production and technology group Global Digital Creations.

Yin also pointed to the legal advantages and superior access to the mainland China market that Hong Kong movie makers have been granted. Overseas films are subject to import quota restrictions and close supervision of co-productions. "This fund is a great way for foreign investors to play the Chinese film market," said Yin.

He said that the fund's $100 million equity component would likely be complemented by a debt component, but would not specify how large. "That depends on the anchor investors, some of which have indicated that they want to co-invest alongside the fund."

The Vanguard fund is the second China fund to launch in the past month. In May it was announced that Tiger8 Media, Chinese investment group Wuxi Jinyuan Industry and Development Co. and Euro-American sales agent Omega Entertainment, are to launch the $150 million Tiger Portfolio Film Fund. Warner Bros. president and COO Dan Feldman said at the time of the announcement that the Hollywood studio "expect(s) to participate in TPF's and Omega's significant flow of upcoming productions."

Vanguard was formed in 2004 and has offices in Hong Kong and China. It currently manages two funds focused on private equity and real estate investments in Asia and last month announced launch of a $450 million water industry fund.