Business Online – IT’S LIGHTS, camera, transaction. Over the past couple of years, hedge funds and investment banks have piled into Hollywood with big money deals. But rather than just lending to the studios, they are betting on potential box office hits by investing in a share of their revenue.
Last month the Lexington Film Fund brought this concept to Britain. Headed by writer-director Gregory Mackenzie and former Morgan Stanley analyst Brett Walsh, Lexington will provide funding for films in their early stages in return for a share of profits.
It has gathered £500,000 (E730,973, $920,456) to fund British films and aims to return between £1m and £3m by the end of June.
Every big Hollywood studio has a deal with a private equity firm. These agreements represent around $2.7bn and are raised mainly from hedge funds such as Stark Investments and Bank of America Capital Investors.
