New look in film finance bows in U.K.
EmptyDavid Parfitt, an Oscar winner for "Shakespeare in Love," is teaming with fellow producer Christopher Figg and lawyer Michael Henry to launch a £200 million ($400 million) film-finance fund.
The Limelight Fund is a film-finance collective fund that will operate as a venture capital trust whose parent company is floated on the London Stock Exchange.
The fund's board already has raised sufficient funds — to bankroll the tax credit on a slate of £200 million on an annual basis — and has set it up with movie production rather than tax avoidance in mind, backers said.
Lawyer and financier Henry is set to detail today at the launch in London that the fund is not coming to the market "in the hope and expectation of raising finance, which may never materialize."
Henry will tell moviemakers that "the money has been raised, and we are now starting the process of investing it in British films."
The board includes Parfitt and Figg as movie producers and advisers and also counts non-exec chairman Stuart Stradling among its number. Stradling was, until May 2006, chairman of corporate broking at Dresdner Kleinwort.
The Limelight Fund is initiated by Limelight VCT Plc., the only venture capital trust investing in films listed on the London Stock Exchange, the founders noted.
The fund model — on the drawing board from more than a year — is shaped by the introduction of the new tax credit system in the U.K. and the latest round of anti-avoidance legislation introduced by the government (HR 3/2).
The Limelight business model has been designed by Parfitt and Figg specifically to provide reliable cost-effective, producer-friendly finance for British films, the fund backers said. Limelight will offer financing in four ways: As an advance of up to 100% of a movie's anticipated tax credit, and as a provider of additional finance for British films by way of sales agency advances and distribution expenses; presales discounting; and development finance of up to 5% of a movie's anticipated tax credit.
Development loans on projects that are successfully put into production will be "rolled over" to provide development finance for the producer's subsequent project, the founders said.
Said Parfitt: "Limelight is a private industry-led initiative that offers producers film finance on terms that are significantly better than those which are available in the conventional film-finance market. Limelight will be a very useful source of support and finance for the British film industry."
Figg describes the fund as "the best-kept secret in the British film industry."
Added Figg: "It has already raised a substantial amount of production finance, without any publicity, and offers British film producers a sustainable source of finance at significant savings over conventional film-finance terms. Limelight deserves the support of the entire British film industry."