China Broadband Capital Partners, a fund run by the godfather of Chinese Internet Suning Tian (aka Dr. Edward Suning Tian) has raised a $283 million venture capital fund with backing by Rupert Murdoch’s News Corp. and George Soros, according to a regulatory filing.
The fund will have “the principle objective of making investments in telecommunications, media and technology related companies with substantial markets and/or operations in the PRC [People’s Republic of China],” documents obtained by PE Week show.
Tian co-founded AsiaInfo (Nasdaq: ASIA), one of the first telecommunications infrastructure service companies to target China, in 1995. It helped companies there set up ecommerce sites and provided early access to the Internet. Tian was tapped by the Chinese government to run China Netcom, a private alternative to the inefficient government-run China Telecom. Tian, who earned his PhD from Texas Tech University, was picked by Red Herring Magazine as one of its top 10 entrepreneurs in 2000 and now is a senior advisor to Kohlberg Kravis Roberts & Co.
Tian will take a 2.5% management fee to administer the fund and a 20% carry on any winnings, documents show. He will also contribute 1.99% of the fund’s capital as a limited partner.
Perhaps it is not surprising that News Corp, through its News America Incorporated subsidiary, would be one of China Broadband’s 17 investors. The Wall Street Journal reported the Murdochs are close friends with Tian. This vehicle may help News Corp expand its MySpace franchise in China.
Currency speculator turned political activist George Soros invested in the fund through Geosor Corporation, a company he is the sole owner of.
Another investor in the fund, which has promised up to $50 million in capital, is telecommunications company PCCW (SEHK:8) through its Internet Applications Limited subsidiary. The company sold 20% of its equity for more than $1 billion to China Netcom in 2005. PCCW says it invested in China Broadband Capital Partners because “The Board considers that the telecommunications, media and technology sector in the PRC presents a wealth of attractive investment opportunities and is likely to flourish in the future.”
Tian is a deputy chairman at PCCW and a member of the executive committee and the remuneration committee. PCCW’s investment is large enough to trigger disclosure of the relationship with Tian, but not large enough to require independent shareholder’s approval, documents show.
Mirabaud & Cie, a privately owned hedge fund sponsor based in Switzerland, also invested in China Broadband Capital Partners.