Hemisphere Capital Management Announces Tentpole Fund

The fund plans to make 12 to 16 investments over the next five years — and the investments will be spread across studios

Hemisphere Capital Management has put together a $200 million-plus investment fund to make tentpole movies, the company announced Tuesday.

Its projects will not be limited to any particular studio.

In fact, its first co-financed projects are Sony's "Smurfs" and "Men in Black 3" and Paramount's "The Adventures of Tin Tin: The Secret of the Unicorn" and "World War Z."

Here's the company's release:

HEMISPHERE LAUNCHES TENTPOLE FUND;
ANNOUNCES FIRST FOUR PICTURES WITH SONY, PARAMOUNT


Los Angeles, August 2, 2011: Hemisphere Capital Management partners Jean-Luc De Fanti, Jeff Sagansky and Eli Baker announced today the launch of the Hemisphere Tentpole Co-Financing Fund, a revolving equity and debt fund with the mandate of co-financing studio Tentpole motion pictures. The Fund intends to accumulate a portfolio of 12-16 investments over a four to five year period across the Major Studios.

As part of the launch, Hemisphere announced its first four pictures in the Tentpole Fund after completing transactions with Sony Pictures Entertainment and Paramount Pictures last week: SMURFS directed by Raja Gosnell (released over the weekend to a very strong and over-performing $35.6M); THE ADVENTURES OF TIN TIN: THE SECRET OF THE UNICORN, directed by Steven Spielberg and produced by Peter Jackson; MEN IN BLACK 3, starring Will Smith, Tommy Lee Jones and Josh Brolin and directed by Barry Sonnenfeld; and WORLD WAR Z starring and produced by Brad Pitt and directed by Marc Forster, which is currently in production in Malta. The aggregate investment in the first four pictures will exceed $200 million of capital commitments to the two Studios.

The Hemisphere Fund includes a mix of both financial and strategic investors convinced by the Fund’s investment strategy and the on-going trend of large picture performance on a worldwide basis. Among Hemisphere investors and strategic partners are Toho-Towa Company and Kadokawa Shoten of Japan and Lotte Cinema of Korea. JP Morgan Chase’s Entertainment Group has been a long-time supporter of the Tentpole investment strategy and is the Fund’s debt financing partner.

Hemisphere’s Jean-Luc De Fanti said: “We have assembled a great team of financial and strategic partners who have also witnessed the on-going worldwide trend in the film business. This allowed us to invest in significant global Tentpole pictures with the highest calibre of talent and filmmakers assembled at both Sony and Paramount. We look forward to expanding our relationship with both Studios."

The Hemisphere strategy also derives from a close relationship with Skip Brittenham and Bryan Wolf of Ziffren Brittenham LLP. In particular, Wolf, a long-time collaborator and advisor of Hemisphere’s management team, was instrumental in structuring the Fund as well as brokering the Studio relationships.

Sony’s Motion Picture Group CFO and EVP Stefan Litt made the deal on behalf of the studio and Paramount’s Daniel Ferleger and Paul Neinstein negotiated on behalf of Paramount. Schuyler Moore from Stroock, Stroock and Lavan represented Toho-Towa, Kadokawa Shoten and Lotte Cinema on investment, tax and distribution matters.

Hemisphere Capital Management partners De Fanti, Sagansky and Baker will manage the Tentpole Fund in addition to the Mezzanine and Special Opportunities Funds (formerly operating under the “Winchester Capital” banner) that focused on certain opportunities in the media, film and television space. The Mezzanine and Special Opportunities Funds have made successful investments with MGM/United Artists, Europa Corp., Senator Entertainment AG and independent film financing such as The Men Who Stare at Goats since 2007.