Despite the latest round of Wall Street upheavals, New York-based hedge fund Elliott Associates has nearly doubled its investment in Ryan Kavanaugh’s Relativity Media, leaving Relativity with more than $2 billion on its balance sheet.
Though the two parties wouldn’t comment on the exact amount of Elliott’s investment, sources peg the figure at about $1 billion. In January, Relativity secured $1 billion-plus from Elliott and created Relativity Capital, a wholly owned subsidiary that finances single films for Relativity’s one-off picture biz. With the latest infusion, Relativity will become more aggressive about acquiring slates, libraries, vidgames and TV and new-media assets.
“Because of the craziness in the marketplace, there are suddenly many attractive assets available to buy,” Kavanaugh told Daily Variety, though he wouldn’t divulge which companies he’s eyeing. “We plan on buying significant companies and libraries in the near future.”
Relativity is also heavily involved in the studio slate financing sphere. Kavanaugh’s company is currently co-financing some 75% of Universal Pictures’ slate through 2011 via its Beverly 2 fund, in which Elliott has a stake.
“We are extremely pleased with our investment in Relativity,” said Jesse A. Cohn, portfolio manager at Elliott. “Thus far, both Beverly 2 and Relativity’s operations have performed beyond our expectations, and we believe there exists significant opportunity for Relativity Capital to continue to acquire complementary media assets at highly attractive valuations.”
In addition to structuring nearly $5 billion in film financing deals for Sony and U, Relativity is expanding its single picture business, with plans to make eight to 10 films per year. Relativity’s past one-off films include “3:10 to Yuma,” “The Bank Job” and “The Forbidden Kingdom.” Among the pics in the upcoming slate are Jim Sheridan’s “Brothers,” starring Jake Gyllenhaal, Tobey Maguire and Natalie Portman; Lasse Hallstrom’s “Dear John”; and the heist thriller “Brilliant,” starring Scarlett Johansson.
Kavanaugh added: “Elliott has been an incredible partner, allowing us to take advantage of the opportunities that present themselves. Furthermore, Elliott’s diligence and structuring teams and resources help to properly and thoroughly evaluate each opportunity and maximize each business’s full potential.”
Founded in 1977, Elliott is one of the oldest hedge funds under continuous management and handles $13 billion in assets.