Yao Capital, the Chinese private equity firm co-founded by former NBA superstar Yao Ming, said it aims to raise $250 million for its first U.S. dollar fund that will invest in overseas sports assets with relevance to the Chinese market.
The firm is in talks with prospective international investors, including university endowments and private wealth managers, about the fund which it plans to launch this year, co-founder and CEO David Han told Reuters in an interview late on Friday.
Han, a former chief investment officer at China’s Wanda Group, added that the company had decided on a U.S. dollar fund after tighter Beijing’s capital controls made it tougher to do overseas deals.
“Many of our targets are abroad. When the government tightened late last year, things did become difficult for us,” said Han, referring to the lengthy approval process for buying foreign exchange and transferring capital out of China. “There’s no doubt that a dollar fund can facilitate our investments overseas.”
Yao Capital, formed early last year, is among China’s first private investors in the sports sector. It will focus on sports-related products such as sports medicine, gaming and sporting rights, said Han, adding that investments would be made in Europe and the United States as well as at home.
“We won’t make overseas investment randomly. It must have a China angle. The targets will certainly be able to be linked to the Chinese market,” said Han.
China has ambitions to dramatically boost its domestic sports industry into a market worth 5 trillion yuan ($730 billion) annually by 2025, compared with 1.7 trillion yuan in 2015.
Han said he expected the country’s sports market to grow at a compound annual growth rate of about 20 percent over the next decade, aided by a supportive government policy and increasing consumer demand for recreational sports-related products.
The Shanghai-based firm last year raised 2 billion yuan for its maiden fund. Investors included tech giant Tencent Holdings Ltd and investment bank China International Capital Corp Ltd.
It has already made six investments at home and abroad, including Singapore-based Glory Sports International, an organizer of kickboxing events, and Iovate Health Sciences International, a Canadian maker of nutritional products such as body building supplements.
Han said Yao Capital plans to fully invest its first yuan fund in the next two years with a focus on growth-stage investment opportunities.
In addition to Yao Capital, Wanda has led several of China’s investments in the sector, including acquiring a 20 percent stake in Spanish soccer club Atletico Madrid and becoming the first Chinese partner company of soccer’s global governing body FIFA.