Trio plans to raise $100 million over year
CANNES — A trio of film financing companies from the U.S. and U.K. — Future Films, Screen Capital Intl. and Stonehenge Capital — are launching a $100 million fund to provide specialized loan finance for film production and other entertainment content.The Aramid Entertainment Fund will be based in London and Los Angeles. Simon Fawcett, currently finance director of Pathe U.K., has been tapped as CEO of Aramid Capital Partners, which will manage the fund. The partners plan to raise the $100 million over 12 months, and expect to start making the first funding commitments to film projects in June. The money will be used in different ways, including to cashflow the U.K.’s new production tax credit, and to discount other international tax credits. Aramid will also consider opportunities to provide pre-production financing, to securitize film assets, to offer mezzanine finance for digital content producers and distributors, and to discount contracted future revenues. “The business of producing and distributing content is changing very rapidly, and conventional sources of finance won’t serve that changing community very well, said Future CEO Tim Levy. “Venture capital comes with a lot of strings attached, so we are positioning our loan finance as an attractive alternative.” Fawcett commented, “Content producers are no longer looking merely for the best tax deal — they are looking for someone who can provide complex customized solutions in situations that are simply beyond the remit of traditional lenders.” Aramid will not provide gap finance, or any other funding that takes a risk on a movie’s performance. Levy estimates that around 75% of the initial $100 million fund will be dedicated to film production, with the remainder targeted at other entertainment content. The coin will be raised from private investors and institutions with which the three partners have existing relationships. Future Films is a U.K. structured finance specialist with a long track record in tax-based funding for production. David Molner’s SCI specializes in cross-border tax financing for studio movies. Stonehenge Capital is a U.S. private equity fund that claims to be the biggest discounter of the Louisiana tax credit.