TCG Capital, led by the former No. 2 at News Corporation Peter Chernin, raised more than $700 million for an investment fund that will invest in a media-and-consumer landscape being fundamentally altered by technology.
TCG Capital, an affiliate of Chernin Group, raised the fund that appears to be its first broadly marketed, traditional-style private equity fund. No one from TCG replied to a comment request Tuesday.
It’s not clear if the fund has finished fundraising. The fund was raised across two pools, TCG 2-A and B, totaling $700,850,000, according to fundraising documents filed with the SEC.
TCG 2-B raised $259 million from five investors, the document said. Fund A raised $441.8 million from 77 investors, the document said.
A report last year in Deadline, a movie industry trade publication, said Chernin planned to raise $500 million for a media fund.
Chernin told Bloomberg in a recent interview that $700 million was the right size for the fund.
“We felt there was a sweet spot between having enough scale to be able to make a number of investments and meaningful investments, but on the other hand, we don’t want to be deal junkies, we don’t want to be just going out there trying to find a new deal every three weeks and feeling the pressure to find a new deal,” Chernin said.
In October, TCG invested $30 million in Exploding Kittens, a tabletop gaming company. Its portfolio also includes subscription news site The Athletic, digital content platform Food52, digital media brand Barstool Sports and gaming media platform Rooster Teeth.
Chernin formed TCG Capital Management last year with Jesse Jacobs, Mike Kerns and Jason Bergsman. Chernin, Jacobs and Kerns are principal owners of TCG Capital Management.
He formed Chernin Group in 2010, according to TCG’s website. Chernin sold a minority stake in Chernin Group to Providence Equity in 2012. Providence is not an investor in the TCG funds, according to a person with knowledge of the situation.
Chernin formed TCG to make private equity investments in media, entertainment, tech, sports and consumer sectors, according to the firm’s Form ADV. The firm had about $482.6 million as of Mar. 25, 2019, the ADV said.
The firm searches for certain characteristics when backing a company, Chernin told Bloomberg: It wants brands that are authentic and whose owners have authority and expertise, that have built a fan base organically and not by paying up for advertising on social media. And importantly, the fan base needs to have demonstrated a willingness to pay for things associated with the brand, including products, subscriptions or even live events.
Consumer experience has been radically altered by technology, Chernin said, and it’s only in the early stages of its evolution.
“You’re seeing middle men disappear, you’re seeing bundles disappear, and what you’re seeing is almost every aspect of the ways consumers experience brands is changing, how they discover brands, how they interact with brands, what they choose to purchase, how they purchase it, how it gets delivered,” he said.
Chernin was president and chief operating officer at News Corporation, climbing the ranks to eventually become second in command to Rupert Murdoch, the New York Times previously reported. He also was chairman and chief executive officer of Fox Group. With Fox as co-owner, Chernin launched Hulu, his biography said.
Action Item: Check out TCG Capital’s Form ADV here: https://bit.ly/2WTd0uw
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