- Investment sought:
- Equity offered:
Glentham Capital is a start-up specialist fund management company. Its initial focus was to raise and manage its first fund, a film production financing fund called Glentham Film. Due to high demand and an excellent team that has now come on board, the fund is expanding to also manage specialist funds operating in various asset classes providing greater diversification for investors. The company's Chairman and CIO is Nicola Horlick, who has been a fund manager in the City for over 30 years. The company's CEO is Pandora Edmiston, whose background is both finance and media.
Glentham Capital has started raising its first fund, Glentham Film, to provide senior secured debt in film production financing structures. The fund will be a Limited Partnership registered in Delaware. Appetite from pre-marketing efforts has been strong and the initial target raise of US$100 million has been raised to US$250 million.
Other funds in the pipeline include a debt fund for the new financial services website Money&Co., of which Nicola is also CEO. These loans will potentially be eligible for inclusion in ISAs.
All of these funds will sit within the Glentham Capital fund management business, with any returns as a result of managing such funds being channelled back to Glentham Capital, and ultimately the Glentham Capital investors.
This is Glentham Capital's second fundraise. The last nine months have been spent marketing the first fund and lining up other funds in the pipeline.
Glentham Capital's remit is to provide fund management for funds with diversified asset classes. Marketing of the first fund, Glentham Film, has shown strong appetite in film as an asset class which we believe is due to its potential to provide portfolio diversification, as the film industry is uncorrelated with the stock market. There has also been significant interest from investors in a film fund managed by Nicola Horlick and a team with a strong financial background. The fund's target raise has been increased in line with this appetite from US$100m to US$250m.
Glentham Film has a target first close of September 2014 with an initial US$50m raise. From pre-marketing efforts to date, is anticipated by the Directors that the majority of finance will come from the US and China, which is why the fund has a GP/LP structure and will be registered in Delaware. Documentation is currently being finalised.
Glentham Capital itself will not be investing in films. It will manage the film fund and receive an annual management fee together with a performance fee. It has a low cost base as Nicola Horlick accommodates the business in premises used by her other businesses.
Substantial accomplishments to date
The structure and the documentation for Glentham Film are almost complete.
Glentham Capital has identified other funds in the pipeline which will be focused on when Glentham Film achieves its first close.
With this ongoing activity, the Glentham Capital share price has risen from £10 per share to £12 per share to reflect the increased value in the company since its inception.
Nicola Horlick has been a leading fund manager in the City of London for over thirty years, during which time she has set up and managed a number of investment businesses. Nicola's success as a fund manager, combined with her experience in both the film and music industries from a fund management standpoint over the last 5 years, have contributed to strong appetite for Glentham Capital's first fund.
Glentham Capital will receive an annual management fee of 2% from Glentham Film. If US$100 million is raised, the annual revenue of the company will therefore be US$2 million. If US$250 million is raised, the annual revenue of the company will be US$5 million. In addition to the annual management charge, Glentham Capital will also be entitled to a performance fee of 20% of profits.
Use of proceeds
The proceeds raised from the second Seedrs fundraise will be used for:
Ongoing legal costs for the structuring of the first fund, Glentham Film, including completion of documentation, further tax advice, further structuring advice.
It will also be used for insurance costs for the structure of the first fund, Glentham Film. In addition there are travel costs to the US and the Far East which will be incurred for investor roadshows for the first fundraise for Glentham Film. Proceeds will also be used for Directors' salaries until Glentham Film is raised, which are reduced until the first fund is fully raised. At that point more people will be employed using the fund management fees.
The company has benefited from free premises during its first year of operation and help from employees in other business run by Nicola Horlick during this period. The company will need to contribute to these costs during its second year of operation. There are also premarketing costs for other potential funds in the pipeline.
Glentham Capital has been established with a view to launching a number of specialist investment funds.
The first, which will be the focus until the end of 2014, will be Glentham Film, which will primarily provide senior debt in film financing structures. The target market is investors in the US, who recognise this asset class as a viable diversifier, and investors in the Far East, specifically China, where box office growth is the strongest globally and there is significant interest in Hollywood productions.
It is Glentham Capital's intention to go on to launch other funds in other sectors. It will seek to provide specialist finance in areas which have been deprived of investment as a result of the credit crunch.
Other funds under consideration:
Money&Co. Debt Fund:
Nicola Horlick is also CEO of Money&Co., a new financial services website that allows individuals who want a better rate of interest on their cash to lend money to small and medium-sized enterprises (SMEs) who need to borrow cash in order to expand their businesses. The Chancellor announced in the Budget that these loans will be eligible for inclusion in ISAs shortly. As a result of this, Money&Co. will need to have a managed fund of loans to make it easier for less sophisticated investors to get exposure to this interesting investment class.
Music Score Fund:
Bramdean raised a fund called Resonant Music I LP in 2008. This fund invested in music rights for film scores and owns the music for some prominent films, including THE KING’S SPEECH, DRIVE, THE WOMAN IN BLACK and ROCK ‘N’ ROLLA. The fund was fully invested after three years and the library of music is likely to be sold shortly. Glentham Capital is considering raising a similar fund when it has completed the raise on the senior debt film-financing fund.
Nicola will lead the investment process at Glentham Capital.
Characteristics of target market
Nicola Horlick has had huge success as a fund manager.
Having been appointed a director of SG Warburg at the age of 28, she was employed by Morgan Grenfell to turn around its UK fund management business. When she joined, funds under management had fallen from £10 billion to £4 billion. Over the next 5 years, she increased them to £22.5 billion.
She then set up SG Asset Management, with a target of raising £5 billion in 5 years, which she did in 2 years.
Nicola has been involved in investing in the film industry since 2008. After the success of the Resonant Music I L.P. fund, she launched Derby Street Films, which develops feature films. Derby Street has invested in 22 film projects.
Nicola understands how the film industry operates. Our view is the returns will be extremely attractive for investors in the underlying fund. As Glentham Capital will earn performance fees, the returns are also expected to be very attractive for its investors.
Nicola Horlick is primarily responsible for raising money for the first fund, Glentham Film, and other funds going forward.
All of the fund management companies that she has run over 30 years have experienced strong growth and she is acknowledged as being one of the most prominent investors in the UK.
Her experience and success as a fund manager have already proved to be very useful in attracting investors to Glentham Capital's first fund, Glentham Film. We believe that this experience, combined with her deep knowledge of the film industry, have made the fund extremely attractive to investors who have an appetite for film who would ordinarily be dealing with producers with no fund management experience. It should be stressed that Glentham Capital is a fund management company, not a film company.
We believe that the investment opportunity offered by investing into Glentham Capital is unique.
Its first fund, Glentham Film, is rare in what it aims to offer to investors - direct investment into a broad slate of already-developed Hollywood films, with strong talent attached. With a first look deal with Derby Street Films and the option to accept submissions from third parties subject to stringent investment criteria, funds can be deployed efficiently and no finance wasted on getting a film 'ready'. This, combined with the fund taking an assignment over security and a senior recoupment position, offers investors an investment with a senior debt profile whilst having the potential to take uncapped equity-like returns via a 50% share in potential profits of every film, in perpetuity.
Whilst there are competitors in the film financing space, we believe that there are none with the combined experience of the team behind Glentham Capital. We are, however, of course competing with multiple investment houses for the investment funds that Glentham Capital will target.
Glentham Capital plans on raising more funds in the future which will provide diversifiers to potential investors' portfolios. We would expect this to create further income streams for Glentham Capital's shareholders.