UK Creative Content EIS fund offers lower risk access to booming industry
The creative industries are now worth more than £100bn to the UK economy and part of this is being opened up to private investors through a new fund supported by the British Film Institute which utilises the 25-year old tax break of the Enterprise Investment Scheme.
The new fund is not focusing on individual films or programmes, but on established companies or experienced entrepreneurs in the sector.
As a result, although the investments are by their nature high risk, they are not as high risk as some previous investments in the sector which have focused more on the tax breaks and less on the longer term potential.
Calculus Capital and Stargrove Pictures have launched a new EIS fund in association with the British Film Institute (BFI) to help deliver vital funding for the UK’s most promising screen content companies. The recommendation for the UK Creative Content EIS Fund came out of last year’s BFI Commission for Uk Independent Film.
The commission set out to explore how to help UK companies diversifying across film and high-end television meet the growing demand for premium content fuelled by well-funded subscription streaming services, such as Netflix and Amazon.
One of its key recommendations was the establishment of an Enterprise Investment Scheme (EIS) fund to encourage a new wave of investors into the sector and deliver vital equity finance to hep independent, UK screen content companies scale up.
The BFI chose partners Calculus Capital and Stargrove Pictures to manage the fund. Calculus created the UK’s first approved EIS fund 20 years ago; and Stargrove’s principals have overseen £1bn of investment, backing productions such as The Best Exotic Marigold Hotel, Suffragette, Call the Midwife , The Fall and Doc Martin.
The team are looking to raise £20m for the Creative Content fund in its first year alone.
The fund will be managed independently, but in association with the BFI, whose work, with its priority focus on diversity and inclusion, has been ground-breaking in successfully finding and propelling the careers of distinctive new voices and talent.
Amanda Nevill, CEO of the BFI said: “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, which have a wealth of experience and knowledge.”
John Glencross, CEO and co-Founder of Calculus Capital, said: “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 have 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 is 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 has a proven track record for creating premium, globally renowned content. The screen sector is one of the UK’s fastest growing – it saw a 51% increase last year with £3.17bn spent on new productions and contributed over £7.9bn to the UK economy. The BFI’s investment in ground-breaking initiatives to develop, diversify and expand the pipeline of world class talent on both sides of the camera and to create new audience opportunities for UK film at home and abroad is focused on the long-term sustainability of the screen sector.
All investments will have received advance assurance from HMRC before Calculus engages capital.
The fund is targeting £2 return for every £1 invested, over a target four-to six year investment horizon. This does not include the generous EIS tax benefits, which are in addition.
It has a minimum investment of £10,000.