Raksha Entertainment and HBS Realtors launch movie fund

With the new fund, Bollywood has three active film funds now

It's a booming industry and very often the window to contemporary India. No wonder then that the Rs 12,530 crore Indian film industry is finally attracting institutional funding. After Kewal Handa and team announced the launch of the Third Eye Cinema Fund, Raksha Entertanment and HBS Realtors (through HBS Venture Promotions) have come together to launch a new SEBI approvedalternate investment fund called HBS Raksha Movies Fund.

With the new fund, Bollywood has three active film funds - Cine Capital, being the third one.

The fund aims to raise Rs 150 crore with a green shoe option of Rs 50 crore. According to the SEBI rules for AIFs, the minimum investment per investor is Rs one crore. The term of the fund is three years and is extendable by a year beyond the fixed term. Also in accordance with the guidelines set by SEBI, the fund will invest a maximum of 25% of the corpus in aproject, which will give it space to invest in a minimum of four projects simultaneously. The HBS Raksha Movies Fund aims to givereturns of 25% (pre-tax / post expense).

While the fund is open to investing atany stage of movie development, the focus will be on distributing Bollywood movies. Raksha Entertianment has experience of distributing movies, especially in the Mumbai and Maharashtra territories, for almost four decades now. The company has released movies like Yuva, No Entry, Mr. India, Disco Dancer, Jawani Diwani, Race, Welcome and Wanted among others. HBS Venture Promotions on the other hand has experience in raising and handling private equity investments. The two will put together their expertise in film distribution and asset management to run the fund.

"Thanks to my father who has been inmovie distribution for almost 40 years and has also been on the board of Balaji Motion Pictures Ltd, we have the resources and connections to aid the distribution of movies through this fund. That will be our focus. We shall look at Bollywood movies primarily with up to 10% involvement in distribution of regional cinema which includes Marathi, Punjabi and Bengali movies," says Rakesh Sippy, MD, Raksha Entertainment.

In the second phase of the fund's operation, Rakesh Sippy intends to take up international distribution of movies. However, a key point in the functioning of the fund is that at no point will it look at acquiring the intellectual property rights from the producers. "We feel that the IP lies with the producers and it's ultimately their creation. So we won't be focusing on accquiring Ips. We will look at domestic distribution and in somecases, will look at trading in satellite rights of movies, which is an important ancillary revenue stream in the industry today," explains Rakesh Sippy.

The fund is led by Rakesh Sippy, MD, Raksha Entertianment and Jayesh Pandya, CFO, HBS Venture Promotions. Also on the investment board are Ramesh Sippy, chairman, Raksha Entertainment and Sandeep Shah, MD, HBS Venture Promotions. The fifth member on the board is Bani Broto Banerjee of India Global Inc.

The fund also has an advisory board that will guide the investments made by HBS Raksha Movies Fund. On this board are industry professionals like actor producer Anil Kapoor, producer Mukesh Bhatt, chartered accountant Bimal Parekh apart from GN Bajpai, ex-chairman LIC and SEBI and Hemang Raja, ex-MD IL&FS Investment and ex-MD, Credit Suisse.