Relativity Capital, a brand new investment partnership between Ryan Kavanaugh's Relativity Media and New York-based hedge fund Elliot Associates, has signed a deal with Universal Pictures to co-finance a significant portion of Universal's slate - approximately 45 films - through 2011.

This will be the first deal in which Relativity acts as the principal and will retain the mezzanine and equity. Under the deal, Relativity will co-finance approximately 75% of Universal's releases during the term. Relativity Capital underwrote the capital structure of the deal and did not use an outside bank.

Universal's vice chairman Rick Finkelstein and executive vice president Michael Joe said the deal would enable them 'to construct a robust slate of quality movies'.

Relativity principal Ryan Kavanaugh added: 'We consider this not just a film co-finance deal, but a true partnership. Relativity Capital, through this transaction, will provide the studio with significant financing for close to 45 films that we believe have significant profit and box office potential.'

Elliot Associates has over $10 billion in assets under management and will be working with and providing financing to Relativity Capital on these media transactions.

'Over the last few years, we have considered many slate financing deals,' Jesse A Cohn, who manages Elliott Associates, said. 'These deals have nearly always paired a strong and profitable studio with a poor structure, or a weak and unprofitable studio with a good structure. This is the first deal we've seen that matches a top-tier studio with a structure that properly aligns the interests of all parties.'

Company COO Andrew Marcus negotiated the deal on behalf of Relativity Media.