The UK film finance sector gets a hopeful boost from a new $80m investment fund with producers David Parfitt and Christopher Figg on board. Geoffrey Macnab reports.
The UK film finance sector has not been in the strongest health lately.
With the closure of the Gaap schemes, the end of Section 48 tax relief, the abolition of sideways loss relief and the prolonged bedding down of the new tax credits, producers have had plenty of worries. This explains the hopes riding on the Limelight Fund, the nascent $80m investment fund to cashflow the new UK tax credits, which announced its first slate of film finance deals this month.
As Martin Churchill, editor of Tax Efficient Review, points out, Limelight is the 'only pure film investment-based offering since Section 48 was introduced in 1997 to have raised substantial investment finance'. Limelight comes billed as a scheme 'devised by British film producers and run for their benefit'.
Two leading UK producers, David Parfitt (Shakespeare In Love) and Christopher Figg (Dog Soldiers), sit on its board and have been intimately involved with designing the business model.
'We first got involved ... because, like most independent producers, we were finding financing more and more complex. What attracted us about this fund is that it is very, very straightforward,' says Parfitt.
Some had predicted that City investment in the UK film industry might dry up following the end of sale and leaseback but that has been proved wrong by Limelight, which has already raised close to $80m (£40m).
The new scheme was initiated by Limelight VCT plc, the only venture capital trust investing in films listed on the London Stock Exchange. The Fund's promoter is financier and lawyer Michael Henry.
Limelight will not only advance up to 100% of a film's anticipated tax credit, but will also provide additional finance by way of sales agency advances and distribution expenses and will lend against contracted pre-sales of UK films.
As Keith Evans of Baker Street Media Finance notes, the scheme seems more stable than recent ones, which have seen government clampdowns. 'The great thing about it is that it is absolutely full-on what the government has been wanting. They have always said post-Section 48 that they want to encourage EIS and VCT.' Evans is producing two of the films in the inaugural slate - Lesbian Vampire Killers and Kitchen Games - and he welcomes Limelight's commitment to development.
The $6.8m (£3.4m) Finding Bin Laden (which Figg is producing) is one of the initial slate of eight films that Limelight is backing, along with Parfitt's $10m (£5m) Bunch Of Amateurs.