Here is another film fund in town. Junaid Memon, a writer, director and producer of films like The Film, Waisa Bhi Hota Hai Part II, and a few regional films, is launching a film fund, along with actor Irfan Khan and ad men Dave Banerjee and Amitabh Bhattacharya.
The fund, called Nomad Film Fund will be a Rs 250 crore ($50 million) fund, 10% of which will come from the promoters. It plans to rope in a top Bollywood actor for its management team, and is in talks with a few Bollywood actors who may join its management, other than a film producer.
Besides personalities drawn from the film industry, the fund’s management team will see significant participation from the banking space. “We would like to have 30% of the total members on the board to come from the financial industry. We are looking at roping in prominent people like ex-chairmen of leading PSU banks and foreign banks,” said Varun Aghara, the CFO and the spokesperson of the fund. The fund is already in talks with the CMDs of two PSU banks.
FUNDRAISING
Nomad Film Fund will have a life of 5 years. It plans to raise about $25-$30 million from foreign institutional investors and $15-$20 million from the retail investors. It expects to return to its investors an IRR (internal rate of return) of 25%. The fund may raise funds from the film industry too. “A few leading actors and actresses have expressed interest in investing around Rs1 crore to Rs 5 crore each in their personal capacity,” said Aghara.
Nomad Film Fund, which is still in the process of getting a SEBI approval, is expected to complete its fundraising in about six months from now.
INVESTMENT STRATEGY
The fund will invest in films and TV production houses via SPV's (special purpose vehicle). “We are also in talks with insurers to insure each and every project for the timely completion and for the stars joining us to not leave us before the completion of the project,” Aghara told VCCircle.
The fund will invest in regional as well as Hindi films, besides investing in television production houses. The fund will not only put in money in films, rather it would control them on a “daily basis”, according to Junaid. He said, “We will be active on the part of the process of delivery of the film that we invest in.”
Talking more on the fund’s criteria for selecting the films for investing, Junaid said that the easiest way to select a film is to go for a film that has “big stars”. He may initially follow this criterion for one or two films. Though, a prospective cinema investor was quick to add, “I feel that easy things don’t give you big money and I am looking for big returns so I plan to pick up new talent and give them a support system.”
SLOWDOWN IN FILM INDUSTRY
Though this may seem to be the season of film funds, with funds like Vistaar Religare Film Fund (VRFF) and Cinema Capital Venture Fund (CCVF) being focused only on films, it is also the time when the film industry is going through a slowdown. VRFF has invested in three films and neither of them have done well on the box office. CCVF, which had initially targeted a total corpus of Rs 750 crore may now alter its plans at raise only Rs 500 crore.
Despite the current economic situation and the downturn in the film industry, Junaid Memon, who has already produced one Hindi film (The Film) and two regional films, is confident of his plans. He said, “I guess this is the right time to launch a film fund as the market is going through a correction. I can get a lot of products at much cheaper prices and that, I think, is the biggest plus point.”