Relativity Media has secured $1 billion-plus from New York-based hedge fund Elliott Associates and launched Relativity Capital, a wholly owned subsidiary that will invest in major media transactions.
With the windfall, Relativity Capital will acquire slates, single films, libraries, vidgames and TV and new-media assets. Relativity Capital will also sponsor or invest in transactions structured by Relativity Media, which pioneered the current phenomenon of Wall Street-backed funds investing in studio slates. To date, Relativity Media has structured and carried out more than $4.5 billion in production slate financings.
Ryan Kavanaugh, a managing principal of Relativity Media, said the move gives Relativity Capital buying power comparable to the biggest media congloms.
Elliott, which manages $10 billion in assets, has been one of the largest investors in Relativity Media’s previous transactions, including the Gun Hill I fund that provided co-financing for 17 films from Sony and Universal.
Kavanaugh called the latest Elliott pact “an important milestone in the company’s growth.” He added, “It enables us to continue to attract the highest-quality media investments, and now, because we are acting as principals, allows us to act even more quickly and efficiently.”
In October, Daily Variety received exclusive access to the Gun Hill I numbers and reported that investors will see profits of $150 million in the short term, or a roughly 13% internal rate of return on their investment, plus an additional $25 million profit over the next three to five years, bringing the internal rate of return to nearly 18%.
Jesse Cohn, who manages Elliott’s relationship with Relativity Media, expressed enthusiasm over the expanded relationship.
“We have had positive experiences in our previous transactions with Relativity and look forward to helping to support their innovative vision in the space,” Cohn said.
Relativity chief operating officer Andrew Marcus said the company is analyzing a number of assets, acquisitions and libraries in which to invest. Separate from its slate deals, Relativity most recently financed James Mangold’s “3:10 to Yuma” and the upcoming titles “Brothers,” directed by Jim Sheridan and starring Jake Gyllenhaal, Natalie Portman and Tobey Maguire; “Mary Queen of the Scots,” starring Scarlett Johansson; and Tom Clancy’s “Without Remorse.”