U.K.-based Prescience Film Finance has a variety of funds under management that have been raised and developed since it launched in 2005, including debt, equity and short term lending.
Headed up by Tim Smith and Paul Brett and chaired by Peter Nichols, it has raised somewhere between £300 million and £350 million ($487 million and $568 million) of financing for pics ranging from “The King’s Speech” to “The Guard” to the upcoming “Fast Girls.”
Investors, says Brett, tend to be high net worth individuals “who have sold their business or practice or who have some cash to invest and have a predisposition toward film.”
Its primary debt fund, Aegis, which is 3 years old and sits at about $50 million, has delivered returns in excess of 12% per year.
Smith says the company has access to $50 million more via lines of credit and bank borrowing, “which gives us around $100 million that we’re rolling over.”
The next step, he says, is to bring institutional money into the mix.
“What we hope to do is double that with another $100 million coming from institutions in a way that hedge funds usually do,” says Smith.
Last year, Prescience merged its sales arm Metropolis with Ealing Studios’ sales division to form Ealing Metro. The joint venture’s slate includes “Fast Girls” and Jack Black starrer “Bailout.”
The company also joined forces last year with financier Perpetual to establish Bridgeworks Capital, which focuses on management of short-term facilities to producers and productions along with managing Prescience’s tactical funds and gradually expanding the scope of its activities.
Smith says the demand for short-term lending is “significant because there is so little money around.”
The amount of coin Prescience can offer ranges from 10% of a budget to 100%, the latter being the case with “Bailout,” which saw Ealing Metro sell 30%-35% of the budget in pre-sales, after which Prescience provided a chunk of equity, some debt and cash-flowed a tax credit.
On the other end of the scale, for example, with upcoming pic “Song for Marion,” toplining Gemma Arterton and Christopher Eccleston, Prescience footed around 35%-40% of the budget.
“What we seek to do is obviously about risk mitigation,” says Smith. “We don’t ever do just equity.”
By the end of the year, Prescience hopes to offer around $270 million with a mixture of equity and debt and plans to up the number of pics it invests in annually from 10 pics to 15-18 films.”That, for us, is the right business model in terms of being the right sum and in terms of being able to take our share of the indie cake with the type of films we want to do,” says Smith.