New fund underlines Asia's rise
$150 mil fund for Chinese productionsCANNES -- If you follow the money a lot more of it in these tricky times is targeted for Asian movies.
To wit, a $150 million private equity fund targeting Chinese movies was unveiled here Monday -- a move that underlines the contrasting financing fortunes of European and Asian filmmakers.
The Tiger Portfolio Film Fund is backed by Tiger8 Media and Wuxi Jinyuan Industry and Development Co., a Chinese investment group, and is allied with Switzerland-U.K.-Los Angeles sales agent Omega Entertainment.
The fund's promoters said the venture expects to attract major Chinese, American and international projects and will open offices in China and Los Angeles. The fund boasts all the bells and whistles: equity, mezzanine and debt financing, which is being provided by Chinese, European and Middle Eastern investors.
"We are pleased to have found our Chinese partner in Wuxi, who is backed by full government support. It is the first time Chinese and other investors have joined forces on a motion picture fund of this magnitude," Omega's Markus Barmettler said.
TPF, Omega and Warner Brothers are in final negotiations on the fund's first picture.
"We are working closely with T8 and Wuxi studios and expect to participate in TPF's and Omega's significant flow of upcoming productions in addition to taking some of our own," Warners' domestic distribution president Dan Fellman said.
"There is a real void in the market place and the studios are anxious to do business with strong suppliers. The Chinese film industry is experiencing tremendous growth, with 375 new screens each year and China's middle class frequenting theaters more now than ever. We see significant potential in bridging this emergent market with Hollywood," said Justin Ackerman, who, alongside Barmettler and Sophie Xu, is a co-managing director and fund promoter of TPF.
Omega will handle international sales on the fund's first slate, which will be announced before November's American Film Market;Standard Chartered Bank Hong Kong is providing contract factoring and a debt facility for the fund.
The new cash for Chinese film comes at a time when both private equity cash and public funding in Europe and the U.S. are shrinking.
Governments across Europe and the European Union itself are beginning to slash soft money pools and further tighten film financing through tax schemes. The EU's Media International, an overseas companion to the long-running MEDIA Programme, is, for example, being slimmed down.
Paul Trijbits, producer of Cannes Competition title "Fish Tank" and a former New Cinema Fund chief at the U.K. Film Council, predicts that public funding in Europe will shrink by 30% over the next two or three years.The U.K. government is diverting vast sums of lottery coin to the London Olympics 2012.
Most Asian economies have not been exempted from the global rout -- though their governments, banks and consumers are significantly less indebted than those in the West -- but the region's film industry is being offered an ever-wider array of financing options by private and government sources.
Last week, Singapore unveiled a support scheme specifically open to international films while the Hong Kong industry is now delivering the first movies backed by the Film Development Fund, the first-ever public money from the territory's normally laissez-faire government.
Private sector funds operating from Asia now include the IDG China Media Fund, Global Entertainment Group, Irresistible Films and India's Vistaar Religare Film Fund.
Steve Zeitchik and Stuart Kemp contributed to this report.