The BFI has launched a new commercial fund aimed at supporting local production companies. The EIS (Enterprise Investment Scheme) creative content fund has been set up with private firms Calculus Capital and Stargrove Pictures.
After a selection process, Calculus and Stargrove were chosen to manage the fund, which will offer tax breaks for investment in screen content. The partners are looking to raise £20M in the fund’s first year. It will be managed independently, but in association with the BFI.
The fund has been implemented to provide equity finance to local production companies looking to capitalize on (and contend with) the growth of SVOD companies in the territory. The idea is to encourage a new wave of investors into the sector and it marks the first time that the BFI, the UK’s lead public organization for film, has collaborated with the private sector to stimulate production funding.
The fund, which is expected to invest in six to 10 companies that are less than seven years old, is targeting £2 return for every £1 invested, over a target four to six-year investment horizon. It has a minimum investment of £10,000. The fund was a recommendation within last year’s BFI Commission for UK Independent Film, chaired by Lionsgate UK CEO Zygi Kamasa.
The UK introduced stricter requirements for EIS funding two years ago, following concerns that the schemes were being misused. All investments in the new fund will receive advance assurance from the UK’s tax authority HMRC before capital is engaged.
Calculus created the UK’s first approved EIS fund 20 years ago. The Stargrove team, led by chief executive Stephen Fuss, have overseen more than £1BN of investment, backing film and TV productions including The Best Exotic Marigold Hotel, Suffragette, Call the Midwife, The Fall and Doc Martin.
Amanda Nevill, CEO of the BFI said, “Never before has the world been so hungry for stories, to be enjoyed on screens big and small. The UK is at the centre, the master storyteller, driving an industry that is amazingly worth almost £8BN to the economy and growing. In the midst of this expansion we are acutely aware of the need for investment so that film and other screen content companies can scale up. The BFI is excited about the opportunities this Fund will present for a new wave of investors to get involved with our magical industry alongside Calculus and Stargrove, who have a wealth of experience and knowledge.”
John Glencross, CEO and co-founder of Calculus Capital, commented, “This is a new breed of EIS fund in this sector. It will focus, not on project finance, but on building and growing companies involved in a broad variety of popular productions, across a range of platforms. Throughout the Fund’s development, Calculus, Stargrove and the BFI have worked to ensure our objectives and investment strategy are aligned with the true spirit of EIS legislation, which is how we’ve always operated.”
He added, “Netflix and Amazon have achieved global growth by offering original premium content to subscribers. Traditional studios, distributors and broadcasters are responding to the challenges of this changing and expanding market. With exceptional talent and infrastructure, the UK is already well on the road, generating unprecedented spend in the UK on making new films and television productions and well positioned to benefit from this trend. We are also seeing increased merger and acquisition activity around content companies. All of this is creating compelling investment and exit opportunities for investors.”
The UK’s vibrant screen sector generated £3BN on new productions last year.