US media holding company The Chernin Group has diluted its stake in Asia, selling a significant minority stake in its Asian investment arm CA Media to private equity group KKR while becoming a minority investor in a new investment platform, Emerald Media.
Emerald, which will be run by CA Media’s leadership team, Paul Aiello and Rajesh Kamat, has around US$300 million to spend from KKR’s US$6 billion Asian II Fund, with a mandate to invest between US$15-75 million in both early-stage and growth-stage opportunities.
That’s enough for around eight to ten deals, and at a larger ticket size than CA Media could deploy, giving Emerald useful leeway to spread its bets in an increasingly competitive space, with more funds from China and Japan scouting Asia’s media landscape.
CA Media started life four years ago with investments in the US$2-25 million range before an injection of capital in 2012 boosted the preferred deal size to US$25-50 million.
“Given the ticket size going up, what will probably happen is our access and the way we look at the market is going to be much broader,” says Rajesh Kamat, joint MD of Emerald Media.
“While building a lot of these scalable start-ups is one opportunity, working with a promoter when he is not in a fund-raise mindset and showing the strategic value that we get to the capital is another,” Kamat adds.
“Third is any asset with a capital-raise mindset.”
A Bigger Playing Field
Emerald also has scope to cover more markets than CA Media, which had focused much of its attention on India and Indonesia.
This should also help the new platform move on more opportunistic deals as changes in digital distribution pick up pace, while weathering economic squalls blowing across individual markets at any point in time.
“We are looking to deploy a lot of our capital in India, because we have the infrastructure there and we see the opportunities there,” Aiello says.
“At the same time, it’s a pan-regional platform, and we see loads of opportunities like we have had in Indonesia and in other Southeast Asian markets, and also moving more North Asia, with the support of KKR and the great presence they have on the ground there.”
Aiello and Kamat will continue to manage existing assets within CA Media’s portfolio, although future deals will now be channeled through Emerald Media.
CA Media’s portfolio comprises a financing deal in Indonesia with a two-year-old free TV network called Net, plus stakes in four assets in India: the Indian arm of production house Endemol Shine India; digital comic book publisher Graphic India; non-Bollywood music promoter Only Much Louder; and Fluence, a talent management startup specializing in social media that was incubated by CA Media.