Riding on the success of the Greenwich Plus Money Market Fund, its flagship fund that was 145 percent subscribed in 2016, Greenwich Asset Management Limited (GAML) is shifting its radar to the creative industry with N1billion Initial Public Offer (IPO) for the Nigerian Entertainment Fund. In this interview, Dayo Obisan, managing director, GAML, tells Obinna Emelike how the fund will encourage the habit of savings and investment in the entertainment industry, collaboration with stakeholders among other related issues. Excerpt.
Why the interest in entertainment?
The sharp growth of the industry and the headroom for further growth formed a compelling argument for us to look towards the sector, especially as the thrust from the private and public sector has been “Revenue Diversification” and “what next after Oil?” since the fall of Oil prices in 2014. We were particularly struck by unfortunate events that had befallen some of the recognized operators in the industry and their chronic financial dependency in the latter years of their career and we thought to ourselves: why don’t we create a product that will encourage the habit of savings and investment in the entertainment industry?
After deliberations and wide consultations with key players in the industry, especially over the last 11 months, we learnt that the industry could do a lot more if capital was more available and relatively accessible, and which would impact the level of growth the operators themselves were looking to achieve. We then structured the mutual fund in such a way that indirect investment in the entertainment industry itself becomes an asset class the fund will be investing a significant portion of its assets in.
Do you think the N1 billion will be oversubscribed?
We are quite optimistic we will exceed the N1billion mark, and what fuels our optimism is the strong feedback and support we have been getting from the entertainment industry operators and supporters. It is very encouraging so far. Also, we believe our existing clients would repeat the confidence shown in our capabilities in 2016 when we launched our flagship fund, the Greenwich Plus Money Market Fund, which was 145 percent subscribed.
We are conscious of the fact that the concept is new, especially the asset class that involves investment in the entertainment industry. However, we believe that the target can be achieved with the right strategy and investor support.
Who are your target audience and how are they going to benefit from the fund?
We are embracing the entire value chain in the entertainment industry, music, film, comedy, producers, writers, upcoming acts, theatre practitioners, cameramen, sound engineers among others. We are interested in the whole nine yards.
The first outright benefit I would mention is sustainable financial independence. We believe investing in the Fund would encourage the habit of savings and investment, which should translate to sustainable financial independence for people within and outside the entertainment industry. You would agree with me that this result is desired because as our analysis shows, the career span of operators in the entertainment is now more threatened to be shorter not just due to the emergence of new acts, genres and technology, but also the fact that the minds of the consumers are now so diverse. This makes it relatively more difficult to be assured of a hit when you roll out a production. So, we think it is critical for operators in the industry to make hay while the sun shines.
Secondly, the Fund will provide investors an opportunity to earn returns by investing in a single instrument, which in turn invests in low-risk interest yielding instruments, shares of fundamentally sound companies and real estate assets. The icing on the cake is the fund’s provision to invest a significant portion of its assets indirectly in the entertainment industry.
What efforts are you making to encourage more stakeholders in the entertainment industry to subscribe to the fund?
We are creating awareness at various levels, from physical engagements through business meetings to electronic media channels and generally leveraging technology to reach the retail market. Our media group started a campaign called the “#MyEntertainment Hook” some days back and the aim is to re-energise the public’s interest in various entertainment sub-sectors through less formal and more interactive means, and this has been a success, though we believe more can be achieved in the coming days.
Also we have been speaking to selected corporates that have shown interest in the development of the entertainment industry over the years and have been getting encouraging feedbacks from the few we approached to support this innovative feat. We are of the view that supporting the fund in some strategic ways which I will not disclose here is a more impactful way of providing sustainable support for the industry. Remember the saying about giving fish and teaching the man to fish? In this case, we see it as supporting the man’s fishing ability.
I know there is no free meal anywhere, how are you going to gain from the project?
There are several benefits to Greenwich Asset Management Limited for daring to conceive and create this product. First is the pioneer status of creating a product that provides a structured and publicly sold instrument that targets the promotion of investment culture, especially within the entertainment industry and creates the first publicly-raised funding channel for the Nigeria entertainment industry. This is the first not only in Nigeria but in West Africa.
Secondly, this is the first rung of the ladder of our involvement in the entertainment industry and the precursor for other strategic initiatives, which we have laid out and which will be revealed to you and the public in due course. So, for us at Greenwich, this marks the cutting of the tape to our marathon partnership and involvement with the entertainment industry. We believe in the potentials of the industry and we are keen on supporting its growth.
I know you may be looking to hear my announcement of a fee or commission for managing the fund or so. Yes, the Fund Manager will be earning a fee but as you will see in the prospectus, the cost of running the fund is at a significant discount to what is allowable. The reason for this is not far-fetched, and is simply to encourage wider participation, stronger returns on investment and to ensure that investors, especially the first-time investors within the target sector are encouraged as much as possible.
How safe are the deposited Funds?
The fund is structured to provide full investor protection and absolute transparency. It is registered by the Securities and Exchange Commission and will be governed by a Trust Deed and an independent Trustee. In line with the provisions of the regulations, assets of the fund will be held by an independent custodian and an annual report of its finances and affairs will be published at the end of each financial year.
The Fund Manager has a duty of care to explore all possible means within the provision of the Trust Deed to protect the value of the fund and also facilitate the realization of the other investment objectives.
What if the subscription fails to raise the needed fund, will you still look for a way to assist the entertainment industry?
To be honest, we have not given any considerable thought to the possibility of failing and we actually are not considering failure as an option. At Greenwich, the question we constantly try to answer is how much success do we want to record in any project we venture into. As I mentioned earlier, the success of this Fund is the start of our long-term relationship and partnership with the industry and we hold it as critical to make a resounding success of it.
