LONDON — Walk through the streets of central London, and chances are you won’t have to wait too long to see the shiny veneer of new money. Whether with the city’s booming house prices, booked-up tables at the most fashionable restaurants or the plethora of big-bodied sedans ferrying immaculately coiffured businessmen from Russia, China and India, London has established itself as the home to the global super-rich.
Similarly, the city is becoming a platform for ambitious media companies looking to go international.
Indian distrib Eros Intl. raised $45 million when it floated on the Alternative Investment Market (AIM) section of the London Stock Exchange in June 2006. One year later, the Indian Film Co., a startup Indian shingle, floated on the AIM, raising $110 million.
The following month, India’s UTV Motion Pictures raised $70 million by listing on AIM. Coin helped push forward the company’s partnerships with U.S. studios Fox (with whom UTV co-produced Mira Nair’s “The Namesake”), Sony and Disney.
“We examined Nasdaq, but its running costs were substantially higher,” UTV CEO Ronnie Screwvala says. “There’s a lot more compatibility between India and London and Europe as a whole.”
While Indian film companies have found the less-stringent regulations of AIM a suitable launchpad for their entries onto London’s stock exchange, it’s less certain whether the abundance of private equity and hedge-fund coin to be found in the city is trickling down to U.K. shingles.
The recent financial instability caused by the subprime mortgage collapse Stateside and consumer panic at Northern Rock, one of Britain’s biggest mortgage lenders, has led some investors to be less sure about dipping into their pockets.
“There has been a setback with the subprime crisis and Northern Rock,” acknowledges Simon Bloomfield, director with Bankside Consultants, which handled UTV’s AIM listing. “But there’s still a lot of money in the system. If the story’s strong enough, investors are still likely to follow it.”
But despite the coin currently sloshing its way around the city, much of it is staying within the confines of the super-rich.
“For all the considerable amounts of money in London, it can be difficult to track it down,” says Simon Crowe, managing director at sales outfit Velvet Octopus, which brokered production financing for $27 million project “The Secret of Moonacre” through domestic coin provided by the U.K. Film Council and U.K. film and TV financing fund.
“Anyway, I don’t live in Mayfair. If I did own a house there, I’d probably sell it.”