Singapore-based Indus Media Entertainment is set to launch a $50 million (approximately Rs 300-crore) offshore fund called Indus Media Capital, which will invest in Hollywood and South Indian films, a top company executive told VCCircle.
The fund has already received soft commitments for $15 million (Rs 90 crore) and has started vetting projects.
Indus Media Capital will officially launch in September this year. Most investors are business houses backed by Indians settled in the Middle East.
“They are excited to invest in the fund given their attraction towards the India connection. The fact that majority of the fund is intended to be deployed in Hollywood is a plus for these investors as the returns are higher than Bollywood,” says Venkat Devarajan, founding director of Indus Media Capital, the investment advisor to the proposed fund.
“The prospects of making money in Hollywood are much more because of the tax credit benefits and time-bound contracts to finish a project in a certain time period,” he added.
Two people in the team—Naveen Chathappuram and Charles Leslie—at Indus Media have prior finance-related experience of 10-15 years in Hollywood. Chathappuram has been a producer of motion pictures whereas Leslie is a member of the Directors Guild of America.
“Their connections will help us get good projects as well,” says Devarajan who was previously CFO of Reliance Adlabs and has held senior position in Balaji Telefilms. Another person on board is South Indian actor and producer PAR Subramaniam.
It is primarily going to be a Hollywood-based project but the fund has huge interests in the South Indian film industry as well as niche opportunities in the digital space like media content, etc. About 75 per cent of the fund will be targeted at the Hollywood market.
The fund will also be tapping Indian talent for projects in Hollywood. These projects include the movie, Night of the Living Dead, which will mark the entry of actor Madhavan into Hollywood; TV series Brown Nation featuring former VJ turned actor Shenaz Treasurywala, which is currently being shot in the US and is targeted at NRIs in the country; and a Malayalam movie featuring actor Fahad Fazil.
The fund will invest between $1 million and $2 million across South Indian film projects and $5 million for a Hollywood project and come in to part fund such movies. The fund will invest via a special purpose vehicle (SPV) which will include other co-investors.
“We would target an internal rate of return (IRR) of 15-20 per cent from these projects,” says Devarajan.
This would mark the third new private fund which will chase Indian movies. Recently another PE fund, Third Eye Cinema Fund, hit first close of its targeted Rs 250 crore fund. Third Eye, which has Bollywood directors Ashutosh Gowarikar, Kunal Kohli and Nagesh Kukunoor on its advisory team, plans to make investments in the range of Rs 5-20 crore and aims at an IRR of 25 per cent at the portfolio level.
Early this year British film-maker of Indian origin Gurinder Chadha said she is launching a $30 million venture capital fund called Bend It Media Fund (BIMF) to invest in film and television projects across the globe, including India.
Chadha, who started her career with BBC Radio and best known for her breakout hit Bend It Like Beckham, is looking at a Cayman Islands-registered open-ended investment vehicle that will invest across four platforms—films, television, live theatricals and digital. She has joined hands with AVT Shankardass, a Delhi-based financier and producer who has backed Hollywood blockbusters like ‘Captain America: The First Avenger’ and ‘Man of Steel’.
Vistaar Religare Film Fund is another PE firm which has backed a few Bollywood movies in the past.
(Edited by Joby Puthuparampil Johnson)