In a move designed to avoid “inherent conflicts of interest,” Relativity Media is spinning off its Universal Pictures co-financing fund to its minority stakeholder Elliott Management Corporation.
The Universal fund, known as Beverly 2, will now be managed by a new affiliate of hedge fund operation Elliott, which, according to a statement, has also agreed to invest additional capital into Relativity to help fund the company’s own production slate.
The statement said the spin-off of Beverly 2 “will allow Relativity to avoid the inherent conflicts of interest that have arisen as a result of Relativity’s move into distribution.” Relativity and Universal are said to have had conflicts over clashing release dates for their respective projects. The companies are also currently working on competing features based on the Snow White story.
Relativity will remain a production company on Universal projects funded by Beverly 2 and Relativity CEO Ryan Kavanaugh will be an executive producer on the projects.
“As our core business of developing, producing and distributing our own product has grown to be competitive in size and scope with the majors, this move allows us to focus our energy on that business,” said Kavanaugh in the statement.
The move is the latest development in relations between Relativity and Elliott. Last month, Relativity Media president Michael Joe moved to a new post at Elliott. Joe is now president of Elliott Media Investments, the new affiliate that will manage Beverly 2 going forward.