The Media Fund

The CHF Media Fund will invest in companies which each individually own the intellectual property rights to a new family entertainment or children’s show originated or developed by CHF. The capital raised will be used to develop, produce and monetise the shows.

The CHF Media Fund will invest in a selection of shows, both those in development and production. An explanation of what constitutes a show in development and a show in production is set out on page 7 of the Information Memorandum, which is available to download on this website.

The success of investee companies will derive from all revenue inflows relating to their intellectual property rights such as broadcasting, licensing and merchandising sales; the potential returns to Investors are not capped and so will be shared pro rata with other investors according to their respective shareholdings.

The CHF creative and commercial committee (the “CCC”) is at the heart of the CHF Media Fund and is key to its success. It is responsible for identifying prospective shows that not only offer excellent family entertainment but also offer the potential to generate significant commercial returns to you as an Investor.

More about the Creative Commercial Committee

The Manager

The Manager is Sapia Partners LLP, a multi asset manager and corporate finance advisory firm. Sapia comprises a team of highly specialised, senior professionals with expertise in investment banking, principal investments and private equity.

The Manager’s role is to provide regulatory oversight and approve investments for the CHF Media Fund proposed by CHF Enterprises. The Manager shall establish its own internal investment committee to consider all viable investee companies sourced and recommended by CHF Enterprises and make the discretionary investment decision for each proposed Investment. The Manager’s team includes senior members who will make the investment management decisions based on advice from CHF Enterprises.

In addition to providing Investors with fund management services, the Manager will also open and maintain a client account with an authorised and reputable banking institution in the name of Sapia Partners LLP re: CHF Media Fund with client trust status together with cash balances.

EIS, SEIS and Animation Tax Credits

The CHF Media Fund’s investments in investee companies with shows in production should qualify for EIS Relief while Investments in investee companies with shows in development should typically qualify for SEIS Relief.

As a consequence, the Investors in the CHF Media Fund should benefit from a blend of the EIS and SEIS and other potential tax advantages as follows. The application and value of any potential tax reliefs depend upon individual circumstances of each person and neither CHF nor Sapia provide any tax advice before making an investment decision.

  • between 30% and 50% upfront income tax relief
  • unlimited Capital Gains Tax (CGT) deferral in respect of EIS investments
  • 50% CGT wipe out in respect of SEIS investments
  • 100% CGT free gains upon disposal
  • Loss relief available – assuming an Investor has capital gains to invest, an Investor risks 13.5p on a £1 SEIS investment and risks 38.5p on a £1 EIS investment
  • 100% inheritance tax relief provided that investments are held at the time of death and have been held for two years

In addition, it is anticipated that all of the shows in which the CHF Media Fund invests will qualify for tax credits under the Animation Tax Credits introduced by the Finance Act 2013. The relief is in effect a 20% rebate on certain qualifying expenditure incurred by each investee company in producing the show. This 20% boost should serve to accentuate investee company profits and reduce any potential losses, therefore further mitigating investment risk.

More on Animation Tax Credits

Development, Production and Investment Process

CHF Entertainment, the production arm of CHF, has a team of industry leading animators, artists and other creatives who are employees of CHF or independent contractors whose job it is to come up with ideas to be considered for development by the CCC. On occasion, if the concept is strong enough, the CCC will consider proposals from external sources.

The CCC will choose the best of these ideas – those with potential for critical acclaim and commercial success – for development and production.

Once the CCC has made its decision, CHF Entertainment will transfer any intellectual property rights it owns in these embryonic ideas to a newly incorporated investee company, one for each potential show.

Each investee company will have at least one director who is wholly independent of CHF. This Independent Director will be responsible for taking decisions and managing the affairs of the investee company where other directors may have a conflict of interest as a result of their roles within CHF.

When referring to a show in development, that show is still at the stage where its concept and characters are being tested and it requires further work before it can be presented to a broadcaster or a digital platform with a view to securing a broadcasting contract.

Typically the funds raised under the SEIS for development of such a show would be used for the creation of a show bible, storyboards, scripts and a pilot. Development costs would vary from show to show depending on the type of animation (2D, CGI, Stop Motion etc) and the complexity of the subject matter. 

When the CCC decide that a show is ready to go into production, further funds will be required. Having exhausted its SEIS limit of £150,000, the investee company can benefit from an EIS investment to raise the necessary funds. Production costs will vary from show to show but would typically be between £3 million to £5 million. It is anticipated that the majority of an Investor’s Subscription Monies will be invested in investee companies with shows in production.

To ensure that investee companies’ shows have the best possible chance of success – both critically and more importantly, commercially – each will have access to the full range of CHF’s extensive expertise and support. Each investee company will engage CHF Entertainment for development, production and animation services. CHF Entertainment will take each show from the brainstorming and storyboard stage through to the production of a full series; devising plots, scripts and commercially attractive characters, advising on colour palettes and appropriate animation or live action techniques. In addition, CHF Enterprises will assist investee companies with their applications to the CHF Media Fund for further funding as and when required for the production and development of investee companies’ shows.

The price per share at which the CHF Media Fund will invest in the investee companies will be determined by how far advanced its show is in terms of its development and production. If a show is still in an incipient state – for example where it has yet to be commissioned by a broadcaster – the risks for an Investor are greater than where a show has already been picked up by a broadcaster or digital media platform. This is the case even when the reliefs under the SEIS are taken into account. To reduce these risks and to give an advantage to those Investors who invest in the CHF Media Fund at an early stage, where an investee company’s show is still in development, the CHF Media Fund will invest at a significantly lower share price. The price at which the CHF Media Fund invests will be approved by the Independent Director.

There is no minimum target investment required before the CHF Media Fund will invest in an investee company. The Manager, on the recommendation of CHF Enterprises, will always reserve the right to switch the flow of investment funds from one investee company to another according to the CCC’s perception of which shows are more likely than the others to attract interest from broadcasters or media platforms. 

The CHF Media Fund’s investments in investee companies with shows in production should qualify for EIS Relief while Investments in investee companies with shows in development should typically qualify for SEIS Relief. As a consequence, the Investors in the CHF Media Fund should benefit from a blend of the EIS and SEIS and other tax advantages as follows:

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Terms & Conditions

These Terms and Conditions were last revised in May 2014

Please scroll down to READ AND agree our terms before accessing the site. By closing this window and proceeding to use the site, you therefore agree to the website Terms & Conditions.

 

Company and Website information

The CHF Media Fund, a combined SEIS and EIS fund, which seeks to make investments in SEIS and EIS qualifying companies which carry on the business of developing and producing children’s and family entertainment shows, and then monetising their content, is managed by Sapia Partners LLP, a limited liability partnership registered in England and Wales with the registered number OC354934 and whose registered office is at 134 Buckingham Palace Road, London SW1W 9SA (the “Manager”).

CHF Enterprises Limited, a private limited company incorporated in England with the registered number 08321672 and with its registered address at The Towers, Towers Business Park, Didsbury, Manchester M20 2SL, will be the strategic adviser to the Manager during the operation of the CHF Media Fund (“CHF Enterprises”).

Regulated by the Financial Conduct Authority

The Manager is authorised and regulated by the FCA under number 550103. The Manager has approved the content of this section of website relating to the CHF Media Fund and the information memorandum in respect of the CHF Media Fund (the “IM”) for the purpose of section 21 of the Financial Services and Markets Act 2000.

Intended Audience and Use of Information

The information on this website is directed only at persons in the UK and does not constitute advice of any kind (including investment, legal or tax advice). It does not amount to an offer or invitation to buy or sell an investment in any fund referred to on this website. It also does not solicit any offer or invitation from companies seeking investment capital in any jurisdiction other than the UK.

Persons resident in territories other than the UK should consult their professional advisers as to whether they require any governmental or other consent or need to observe any formalities to enable them to invest in the products described in these pages.

Investors should not rely on any information or opinions contained in this website in making an investment or other decision but should obtain appropriate and specific professional advice.

Applications To Invest in the CHF Media Fund

Applications to invest in the CHF Media Fund should ONLY be made on the basis of the information set out in the IM and the terms and conditions of the applicable investor’s agreement.

Applications for investment in the CHF Media Fund from prospective investors who would be deemed to be “retail clients” of the Manager will be accepted only where in the view of the Manager, such investment in the CHF Media Fund is suitable for that investor in accordance with COBS 9.2. Such assessment of suitability will be based on whether the investment in the CHF Media Fund meets the investor’s personal investment objectives, he or she is able to financially bear any related investment risks consistent with his or her investment objectives; and that he or she has the necessary experience and knowledge in order to understand the risks involved in relation to the CHF Media Fund.

General Risks

As a prospective investor in the CHF Media Fund, you should be aware that there are numerous risks associated with venture capital and particularly investments that qualify for tax relief under the Seed Enterprise Investment Scheme (“SEIS”) and the Enterprise Investment Scheme (“EIS”) which the CHF Media Fund is intending to make. Those risks that the Manager is aware of and deems to be material are set out in detail in the IM and prospective investors should thoroughly read, understand and familiarise themselves with these risks and consult an authorised financial adviser prior to making any investment in the CHF Media Fund. However, you should note that there may be additional risks that the Manager is not aware of or currently believes not to be material which may have a detrimental effect on the value of investments.

Past performance is not necessarily a guide to future performance. The value of an investment may go down as well as up, in which case an investor may not get back the amount invested. Investments in small unquoted companies carry an above-average level of risk.

Risks specific to SEIS and EIS Funds

Investing in smaller, unquoted companies which constitute SEIS and EIS qualifying companies is a high risk investment strategy. Proper information for determining the value of SEIS and EIS investments or the risks to which they are exposed may not be available. Investment in such SEIS and EIS companies can offer good investment returns but by its nature is illiquid and uncertain and consequently involves a higher degree of risk than a portfolio of quoted shares. Realisation of investments in unquoted companies can be difficult and may take considerable time. There is no liquid market on any public exchange or elsewhere; as such, an investment in the type of companies in which the CHF Media Fund will invest will not be readily realisable.

To qualify for the up-front SEIS and/or EIS income tax relief and the various capital gains reliefs, an investor must retain their shares in an investee company for a minimum period of three years from the subscription date. Failure to do so will lead HMRC clawing back any of the reliefs claimed. HMRC may also claw back any reliefs claimed, if the investor has received value from an investee company.

Furthermore, although the Manager will take reasonable steps to ensure that investee companies are qualifying companies for the purposes of the SEIS and EIS, there is a possibility that an investee company may lose its qualifying status and again, this may lead to tax reliefs being clawed back by HMRC in relation to that particular investment. The Manager can make no guarantees as to an investee company’s qualifying status for SEIS.

Investors should also be aware that while the CHF Media Fund has been set up to comply with current legislation, it may be the case that the EIS and the SEIS and applicable legislation is amended or withdrawn leading to the withdrawal of any opportunities for tax reliefs.

Privacy Policy

Any information you provide to us will be used to administer your requirements and determine the information and documentation that we will send you.

Occasionally we may also use your details to inform you of other features, services and products which we think you may be interested in and we may contact you by post, fax, email or telephone. We will keep your personal information confidential except to the extent that we are compelled to disclose it by law or to comply with an instruction of a regulatory body of competent jurisdiction. To comply with the requirements of the Data Protection Act 1998, we adhere to strict security procedures and have taken all appropriate measures to ensure that no unauthorised disclosures of your details are made to a third party without your permission and unauthorised access to it is prevented.

Liability

CHF Enterprises will take reasonable care to ensure that the information provided on this website is accurate and up to date, although no representations or warranties are given of any kind, express or implied, with regard to the accuracy or completeness of this information.

CHF Enterprises and its directors, employees and officers exclude all liability and responsibility in connection with the use of this website. Users of this website do so entirely at their own risk.

CHF Enterprises may amend the content of this website or any part of it, or may periodically make it unavailable for updating, with or without notice, at any time, and are not liable to users of this website for any effect thereof.

The above limitations and exclusions do not purport to apply to liability for fraud, or for death or personal injury caused by negligence.

Tax

Tax assumptions are subject to statutory change and the value of tax reliefs will depend on your individual circumstances. The tax reliefs available to certain investors in SEIS and EIS companies are dependent on the company maintaining HM Revenue & Customs approval. If this approval is withdrawn, a company will lose its status and all tax reliefs are likely to be cancelled. UK based investors must retain their shares for three years to retain the up-front income tax relief. Prospective investors should ensure that they read the risk warnings set out in the IM.

Contact Details for Further Information and Queries

If you have any queries regarding this website, or would like further information about the CHF Media Fund, you may send an email to info@chfmedia.com or telephone 0845 512 1000. Full contact details for the CHF Media Fund are available on the Contact Us page of this website.

 

 


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