TCG Capital, formed by Peter Chernin, the former No. 2 at News Corp, is targeting $800 million for its next fund to invest in the digital evolution of the media and consumer world, a person with knowledge of the firm told Buyouts.
TCG straddles the line between venture capital and growth equity, backing young and aggressive companies like Barstool Sports, Exploding Kittens and Goldin Auctions. It looks for brands with distinct customer loyalty with the ability to monetize that relationship through products, subscriptions and events.
The group, an affiliate of Chernin Group, could raise around $500 million in a first close for the pool, the person said. TCG Capital is calling the vehicle its third fund, even though the prior fund, which closed in 2019, was the group’s first commingled fund. Prior to that fund, the group used a holding company-type structure.
Park Hill Group is working as placement agent on the fundraising. No one from TCG Capital replied to a comment request this week.
TCG closed Fund II on more than $700 million in 2019, for its first broadly marketed, traditional-style private equity fund. Chernin had targeted $500 million for the fund, according to a report in Deadline, a movie industry trade publication in 2018.
Chernin formed TCG Capital Management in 2018 with Jesse Jacobs, Mike Kerns and Jason Bergsman. Chernin, Jacobs and Kerns are principal owners of TCG Capital Management, according to the firm’s Form ADV.
Bergsman left TCG Capital last year to become CEO of AGBO, an entertainment company formed by directors Anthony and Joe Russo, according to a statement from the company. The Russo brothers directed Avengers: Infinity Wars and Avengers: Endgame, while AGBO produced feature film Extraction, which debuted on Netflix last year.
As of Dec. 31, 2020, TCG Capital managed more than $1 billion, according to the Form ADV.
Chernin Group also launched a special purpose acquisition company, TCG Growth Opportunities, in March to raise up to $250 million. Chernin will lead the SPAC along with Jacobs and Kerns. Directors include Li Jin, founder of Atelier Ventures; Barstool Sports CEO Erika Nardini; former Coca-Cola senior vice president Emmanuel Seuge; and Flatiron Health CEO Nat Turner.
TCG in February invested around $40 million in Goldin Auctions, a collectibles and trading cards marketplace. Other TCG investments include Food52 and Cameo.
The firm searches for certain characteristics when backing a company, Chernin told Bloomberg in a prior interview: 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.
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.