Vanguard Films,the production company headed by Shrek 2and Shrek producer John Williams andNeil Braun, is exploring European investment sources to bankroll an initialslate of five animation films.

The long-termfinancing pact is aimed at building on the company's foray into the independentsector with Valiant, Happily N'Ever Afterand Space Chimps.

Braun told ScreenInternational that he is pursuing talks with several potential partners but twooptions are most likely. In Germany, he is in talks with investment partnersfrom Happily N'Ever After to accesstax-driven funding for an initial five animation films. The partners would havean option of extending the relationship to ten titles.

Braun, a formerhead of Viacom Entertainment, is also in talks with other potential investorsto arrange equity from two or three sources, which would be topped up with bankdebt to make up to 15 pictures. The German deal is exclusively for CGanimation, but the other is not. If Braun ties up both deals this year, the secondcould boost Vanguard's live-action activities.

Braun sees along-term financing deal as the next step for Vanguard after it startedoffering independent distributors animation titles through UK-based salescompany Odyssey Entertainment. Vanguard already has development and overheadfunding after selling a minority stake to the animation offshoot ofdeep-pocketed telecommunications company IDT.

"We have enoughcapital in the company to develop scripts and cover overheads for several yearswithout raising money, but each time we are ready to go into production'we havegot to assemble financing on a standalone basis," Braun said.

Odyssey isshowing footage from the $40m Valiantat Cannes ahead of an anticipated Easter release in the US through Walt Disney,which has a multi-picture deal with Vanguard, and Entertainment in the UK.

Space Chimps, to be voiced by Seann William Scott, starts thisyear at London's Ealing Studios once Valiantis finished. Williams added that the biggest factor in keeping budgets down forindependent distributors is reducing the production cycle.

"Our productionstake two years from start to finish," he said. "Features I know about atstudios take three years at least'They will be spit balling, finding the storyalong the way. We work much more like a live action film; we don't start untilwe have we have a great script."