BREAKING: An announcement just went out that Jean-Luc De Fanti, Jeff Sagansky and Eli Baker have launched the Hemisphere Tentpole Co-Financing Fund, a revolving equity and debt fund that intends to co-finance 12-16 films over a four- to five-year period. They start with last weekend’s The Smurfs, and the upcoming The Adventures of Tin Tin, Men In Black 3 and World War Z. My colleague Nikki Finke broke most of this stuff last week, when she wrote that Sagansky, De Fanti and Baker’s Winchester was behind the co-financing effort. They are simply calling it by another name. The new wrinkle is World War Z, the Brad Pitt zombie movie. Paramount insiders said there was another financing entity besides the studio and David Ellison’s Skydance that got the $125 million movie moving, but they wouldn’t reveal the funding source. Obviously is was Hemisphere. Here’s the official release:
Los Angeles, August 2, 2011: Hemisphere Capital Management partners Jean-Luc De Fanti, Jeff Sagansky and Eli Baker announced today the launch of the Hemisphere Tentpole Co-Financing Fund, a revolving equity and debt fund with the mandate of co-financing studio Tentpole motion pictures. The Fund intends to accumulate a portfolio of 12-16 investments over a four to five year period across the Major Studios.
As part of the launch, Hemisphere announced its first four pictures in the Tentpole Fund after completing transactions with Sony Pictures Entertainment and Paramount Pictures last week: THE SMURFS directed by Raja Gosnell (released over the weekend to a very strong and over-performing $35.6M); THE ADVENTURES OF TIN TIN: THE SECRET OF THE UNICORN, directed by Steven Spielberg and produced by Peter Jackson; MEN IN BLACK 3, starring Will Smith, Tommy Lee Jones and Josh Brolin and directed by Barry Sonnenfeld; and WORLD WAR Z starring and produced by Brad Pitt and directed by Marc Forster, which is currently in production in Malta. The aggregate investment in the first four pictures will exceed $200 million of capital commitments to the two Studios.
The Hemisphere Fund includes a mix of both financial and strategic investors convinced by the Fund’s investment strategy and the on-going trend of large picture performance on a worldwide basis. Among Hemisphere investors and strategic partners are Toho-Towa Company and Kadokawa Shoten of Japan and Lotte Cinema of Korea. JP Morgan Chase’s Entertainment Group has been a long-time supporter of the Tentpole investment strategy and is the Fund’s debt financing partner.
Hemisphere’s Jean-Luc De Fanti said: “We have assembled a great team of financial and strategic partners who have also witnessed the on-going worldwide trend in the film business. This allowed us to invest in significant global Tentpole pictures with the highest calibre of talent and filmmakers assembled at both Sony and Paramount. We look forward to expanding our relationship with both Studios.”
The Hemisphere strategy also derives from a close relationship with Skip Brittenham and Bryan Wolf of Ziffren Brittenham LLP. In particular, Wolf, a long-time collaborator and advisor of Hemisphere’s management team, was instrumental in structuring the Fund as well as brokering the Studio relationships.
Sony’s Motion Picture Group CFO and EVP Stefan Litt made the deal on behalf of the studio and Paramount’s Daniel Ferleger and Paul Neinstein negotiated on behalf of Paramount. Schuyler Moore from Stroock, Stroock and Lavan represented Toho-Towa, Kadokawa Shoten and Lotte Cinema on investment, tax and distribution matters.
Hemisphere Capital Management partners De Fanti, Sagansky and Baker will manage the Tentpole Fund in addition to the Mezzanine and Special Opportunities Funds (formerly operating under the “Winchester Capital” banner) that focused on certain opportunities in the media, film and television space. The Mezzanine and Special Opportunities Funds have made successful investments with MGM/United Artists, Europa Corp., Senator Entertainment AG and independent film financing such as The Men Who Stare at Goats since 2007.
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