Hedge funds have gone Hollywood.
Chasing high returns, money managers are plunking down hundreds of millions of dollars to finance films like “Superman Returns” and “Nanny McPhee.”
For entertainment lawyers, it’s an opportunity to shine in new supporting roles. The influx of money from hedge funds and private-equity firms is reshaping film financing deals, leading lawyers toward lucrative transactions and new clients who might want a little glamour-by-association.
“It’s always been fun cocktail conversation,” said Lawrence Ulman, the co-chairman of the entertainment group at Gibson, Dunn & Crutcher.
“All of a sudden, we’ve become the focus of East Coast money looking for high returns,” adds Michael Mayerson, the co-chairman of Loeb & Loeb’s entertainment group. “Almost every weekend, there’s a movie in the box office backed with hedge fund money.”
Among the recent, large-scale private-equity-funded deals:
Legendary Pictures, a vehicle for a number of hedge funds, has put up $500 million for 25 Warner Brothers’ films, including “Superman Returns” and “Lady in the Water.”
Through its Gun Hill subsidiary, Relativity Media has invested $600 million to co-finance 18 films at Sony and Universal including “RV” and “Nanny McPhee.” In May, Relativity announced its Gun Hill Road II fund would invest $385 million in 11 Sony films and $315 million in nine from Universal.
Dune Entertainment, an affiliate of Dune Capital Management, has invested $325 million, betting on 28 films at 20th Century Fox. Among Dune Entertainment’s credits thus far: “X-Men: The Last Stand” and “The Hills Have Eyes.”