The recent approval of the initial public offering (IPO) of N1 billion for the entertainment industry by the Securities and Exchange Commission (SEC) is very positive, according to analysts.
The importance lies in investment opportunities and access to funds needed in providing technical input, skills development and world-class equipment which should close the infrastructure gap in the industry.
Tagged the Nigerian Entertainment Fund, is Nigeria’s first mutual fund. It focuses on promoting investment culture, especially among practitioners in the entertainment industry. The fund is sponsored and will be managed by Greenwich Asset Management Limited (GAML).
It is seen as a balanced fund which will be invested in various asset class. The sponsors are targeting to raise N1 billion through the issuance of 10,000,000 units of the fund at N100 per unit, from investors within and outside the entertainment industry, at its initial offering.
In his presentation, Dayo Obisan, managing director of GAML, highlighted the growth and prospects of the industry. He also highlighted and positive impact on the income of practitioners, and observed that, “The growth prospect of the industry and the unpegged income of the players, form a compelling consideration for us to create a financial product that further promotes the culture of savings and investment among practitioners, and also contribute to the industry’s development”.
Dayo Obisan, managing director of GAML, said the fund opens for subscription in August 2017 and it’s structured as an open-ended fund with plans to make annual distributions to investors.
He assured on the positive subscription of the fund, in line with the previous fund GAML managed. Obisan also said the Entertainment Fund would be oversubscribed like the Greenwich Plus Fund. The money market fund recorded 144.8 subscription at its IPO in August 2016 and has continually paid quarterly income distributions to its investors since commencement of operations in September 2016.
Obisan disclosed that the growth and prospects of the industry and positive impact on the income of practitioners are the propelling force behind the fund.
“The growth prospect of the industry and the unpegged income of the players form a compelling consideration for us to create a financial product that further promotes the culture of savings and investment among practitioners and also contribute to the industry’s development”.
However, Amun Osagie, a capital market player, who reviewed the fund, encouraged Nigerian entertainment industry stakeholders to subscribe to it because it is a product that provides a structured and publicly sold instrument that targets the promotion of investment culture, especially within the entertainment industry.
He said it further creates the first publicly-raised funding channel for the Nigeria entertainment industry. “This is the first, not only in Nigeria, but in West Africa”.
Another reason to subscribe for the fund, according to Obisan, is that it 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”.
Speaking from a stakeholder’s perspective, Richard Mofe-Damijo, a renowned actor and an independent investment committee member of the approved fund, said the fund is providing entertainers opportunity to face their creative jobs, while leaving the management of their investments in the hands of professionals like Greenwich.
“I believe much better results emerge when professionals do what they know best. In this case, we face our entertainment business and leave the management of our investments to professional managers like Greenwich,” Mofe-Damijo said.
But Kunle Afolayan, an ace movie producer and CEO, Golden Effects Studio, said subscription to the fund would encourage investment habits among entertainers and also provide a pool of funds from which they can draw to invest in areas of need in their production and business.
It would be recalled that many industry players denied having access to the $200 million Nollywood Fund purportedly given by the Goodluck Jonathan administration, to lift the entertainment industry. Many also claimed that the N1 billion NollyFund, courtesy of the Bank of Industry, to support movie production and distribution in Nigeria, has not benefited everyone. But the involvement of the Securities and Exchange Commission and management by Greenwich, according to Obisan, gives the fund credibility.
