Aramid Capital Partners has launched a second entertainment fund to meet demand for investment opportunities in the global entertainment industry,
Aramid Capital Partners has launched a second entertainment fund to meet demand for investment opportunities in the global entertainment industry, which the firm says is forecast to grow by 6.7 per cent globally this year and by 7.3 per cent in 2009.
Aramid II will mainly provide medium- to long-term liquidity, in the form of senior and mezzanine financing loans, in media library asset-backed transactions, film, TV, music and forger digital content portfolio transactions, receivable aggregations and other media-related special situations.
It will also take part in co-financing arrangements for studios, sales agents and talent agencies, where third party contribution is needed towards the financing of a substantial, multi-year portfolio of films to be produced and/or released by the studio.
The Cayman-domiciled fund is initially looking to raise USD250m and is targeting net returns of between 12 and 15 per cent. It aims to repeat the success of Aramid I, which continues to provide shorter-term debt finance for the production of films, television programmes and video games.
The first fund provides bridge, mezzanine and tax credit financing to independent filmmakers, TV producers and distributors, secured against assets including tax credits, revenue participation rights, distribution rights, underlying copyright, sales contracts and other receivables.
The first fund has grown to nearly USD300m in assets since its launch in October 2006, posting full year returns exceeding 20 per cent in 2007 and of 9 per cent so far this year. It has outperformed both the Lehman Aggregate Bond Index and the Credit Suisse-Tremont Hedge Fund index, a performance that Aramid says reflects the fund’s ability to generate positive returns in a stressed economic environment.
Aramid I’s investments have been undertaken in approximately 40 projects to date, including the provision of production debt funding for two current film releases, How To Lose Friends And Alienate People, based on Toby Young’s memoir of life at Vanity Fair, starring Simon Pegg and Kirsten Dunst, and W., the film based on the life and presidency of George W. Bush directed and produced by Oliver Stone.
“The entertainment industry continues to offer strong investment opportunities,” says Aramid chief executive Simon Fawcett. “Our second fund will allow Aramid to take advantage of additional investment opportunites beyond the scope of its first fund, while continuing to generate significant positive returns even in a difficult economic environment.”
Aramid Capital Partners is backed by Future Capital Partners, Screen Capital International and Stonehenge Capital, which between them have executed USD10bn in film financing over the past decade. Its management is headed by Fawcett, who has more than 14 years experience in TV and film financing, along with Future Capital founder Tim Levy, Screen Capital founder David Molner and Stonehenge Capital president Thomas Adamek.
