Conglom to invest pension fund in the movie biz
The pension fund belonging to Fortune 100 conglom Honeywell Intl. has planted a major stake in Legendary Pictures, becoming the first pension fund of its size to invest directly in the movie biz.
Legendary — Warner Bros.’ co-financing partner on tentpoles including “Superman Returns” and “Batman Begins” — announced Monday it has raised an additional $100 million in equity, boosting its coffers from $500 million to $600 million.
Much of the additional equity comes from Honeywell’s pension fund, which controls assets of more than $19 billion, according to knowledgeable sources. Two other private equity groups contributed to the additional $100 million raised by Legendary.
Legendary wouldn’t confirm or deny Honeywell’s stake. Honeywell did not return phone calls.
New Jersey-based Honeywell, a major defense contractor, is a $28 billion global technology and manufacturing conglom whose inventory includes aerospace products, jet engines, building technologies and automotive products.
Historically, pension funds have tended to be more conservative in their investments, although that has changed in recent years. They also like to keep their investments private. And while they certainly have bought up shares in the media mega-congloms, they have generally shied away from Hollywood.
But, like other investors, pension funds are looking for new sources to grow their money. In recent weeks and months, a parade of private equity investors has come to Hollywood to ink co-financing deals with the major studios.
In addition to the new equity participation, JP Morgan has enhanced Legendary’s senior debt facility.
Legendary, led by veteran financier Thomas Tull, splits the production cost of a movie 50-50 with Warners — along with all profits from all revenue streams.
The initial agreement inked with the studio calls for Legendary to co-produce and co-finance at least 25 pics over the course of five years.
“The additional capital will ensure that we can continue to make movies like ‘Batman’ and ‘Superman’ and other event-type pictures that Alan Horn and Jeff Robinov and their team have done such an amazing job at. We’re thrilled with the relationship,” Legendary chairman-CEO Tull said.
Warners is already planning sequels to “Superman Returns” — which bows June 30 — and “Batman Begins.” Legendary most likely would partner on those installments as well.
Other pics Legendary is co-financing include M. Night Shyamalan’s upcoming “Lady in the Water” and “The Ant Bully,” another summer release.
Legendary varies from the other new private equity production funds in that it wants to develop projects, in addition to partnering and co-financing Warner pics.
(Jill Goldsmith in New York contributed to this report.)