Calculus Capital and Stargrove Pictures have launched an Enterprise Investment Scheme (EIS) fund for UK media content producers, in association with the British Film Institute (BFI).
The trio are looking to raise £20 million for the UK Creative Content EIS Fund in its first year and will be targeting investments of between £1-3 million in around six to 10 companies.
All investments will have received advance assurance from HMRC that they qualify for the EIS scheme before capital is engaged. At a launch event held at the BFI Building in London, representatives from both
Calculus and Stargrove confirmed conversations had taken place with HMRC to ensure such a fund was possible under the recent EIS rule changes.
John Glencross, CEO and Co-Founder of Calculus Capital, said: “One of the first things we did was talk to the relevant key people at HM Treasury, HMRC and DCMS [the media ministry]. They are supportive of investing in the right spirit of EIS.
He continued: “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.
“We know what HMRC expects to see. The BFI has done a huge amount of work so that everybody is on board and we have been getting supportive comments from across government.”
Harriet Finney, director of external affairs at the BFI, added that a lot of communication has been undertaken to ensure the fund is correctly positioned and the BFI feels “very secure” about the fund.
Commenting on the launch of the fund, a spokesperson for HMRC added: “We are glad to be seeing a positive change in how film companies seek and use the investment.”
The fund will focus on companies set up for future growth and development, as opposed to those undertaking single projects. As such, it will focus on companies which have an existing track record and development slate, as well as industry connections.
According to BFI statistics, the screen sector is one of the UK’s fastest growing sectors, with a 51% increase in new productions to £3.17 billion, contributing over £7.9 billion to the UK economy last year.
Amanda Nevill, CEO at the BFI, said: “Never before has the world been so hungry for stories, to be enjoyed on screens big and small. The UK is at the centre, the master storyteller. 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.”
Glencross added that Calculus is well-placed to take advantage of this demand because it is experienced in investing in growth companies across a variety of sectors.
All those involved believe there remains scope for further investment in this sector through the EIS, with Stephen Fuss, chief executive of Stargrove Pictures, pointing out that after the initial hiatus in approvals from HMRC, a number of investments have recently been granted advance assurance. He added that the BFI’s involvement in the UK Creative Content EIS fund “should give confidence to investors”.
The fund is targeting £2 for every £1 invested over a four to six-year investment horizon. It has a minimum investment of £10,000. Companies invested in by the fund may also still be eligible for Film Tax Relief, which is available at 25% of qualifying film production expenditure, if appropriate to the nature of their activities.