Aegis Film Fund has launched two share classes that will open the fund up to a broader range of retail and institutional investors.
This is in response to increasing investor demand for a product that enables them to invest in the booming film industry but also minimise risk.
According to Aegis, the film industry is set to be one of the hottest investment opportunities of 2010. The financial crisis has meant the banks that traditionally financed films have pulled out of the sector. This has provided a window of opportunity for other investors, especially as the worldwide box office remains buoyant having reached another all-time high of USD28.1bn in 2008.
The Aegis Film Fund, which has returned 8.32 per cent in the first six months since its March inception and is on track to return over ten per cent by year end, provides finance to producers and distributors of films operating like a media focused bank. This finance is in various forms of loans or debt on a short to medium term basis. The fund only invests in asset backed corporate debt and does not take equity stakes in a film, minimising the risk to investors. The fund is targeting at least 10 per cent annual returns.
The two new share classes have no upfront fees and have been created to meet the separate requirements of retail and institutional investors. The new E-Class will have a minimum investment of USD100,000 whilst the I-Class has been designed for institutions wanting to invest at least USD5m.
The launch of the new share class coincides with the imminent release of St Trinian’s 2, one of the films the fund has financed.
James Swarbrick, director, Aegis Capital Partners, says: ‘We launched the Aegis Film Fund as we spotted a mismatch between the success of the film industry and the ability of producers and distributors to finance new films. By returning 8.32 per cent in the first six months, the fund has shown that there are huge opportunities for those who can provide this financing.
“Whilst investors see the possible high returns that can be made in the film industry, they want to invest in a way that is accessible and minimises risk. This is why the fund only invests in debt rather than equity and why we have now launched these new share classes which appeal to sophisticated investors.
“The Fund has a very strong pipeline at the moment and is currently investing in a range of films with huge box office potential including The King’s Speech, The Guard, Sex & Drugs & Rock & Roll and the soon to launch St Trinians’s 2.”
