ERGO Equity Partner, a subsidiary of the German ERGO Insurance Group, has launched Entertainment Equity Pool I, a fund aiming to raise 150 million to invest in the media and entertainment sector.
ERGO’s business partners in this venture are two German companies, IM Internationalmedia, a company which develops, finances and distributes films and Mediastream, a consulting and investment company specialised in the media sector. A joint venture company, Entertainment Equity Group, will manage the fund.
Each of the three companies involved has made a capital commitment to the fund and
holds an equal stake in the fund management company. ERGO Equity Partner provides the financial know-how, is responsible for designing and structuring the fund and supporting the management team. IM Internationalmedia and Mediastream will generate deal flow and contribute to the fund’s management through their industry knowledge and network of contacts. A board of mentors, key individuals from within the media and entertainment sector, will also advise the investment professionals at Entertainment Equity Group.
ERGO Equity Partner identifies attractive markets for venture capital funding and then seeks strategic partners with experience in that sector. Last year the investor established a 150 million high tech venture capital fund with DEWB, the VC subsidiary of German technology firm, the JENOPTIK Group. Entertainment Equity Pool I is currently being marketed to institutional investors, mainly German banking and insurance groups. Christian von Oppen, part of ERGO Equity Partner’s fund development team, says: “The market is very interested in this fund structure. The sector we are focusing on has a prosperous future and there are few venture capital companies investing in media content. Most focus on the technology side of entertainment and media.”
Investments from the fund will focus on innovative companies developing and applying media and entertainment content, such as TV, film, music, entertainment software and interactive media.
Clemens von Berger and Rolf Engelhardt, board members of ERGO Equity Partner, said: “Due to new digital distribution platforms the demand for content will increase over the next years. Through Entertainment Equity Pool I we now have the possibility to cover rising capital requirements of many content companies and thus participate in the growth of this business.” Investments from the fund are likely to be in the region of 5 million and will concentrate on companies in their post-start-up phase with business models that are already established in their market. The fund will invest primarily in Europe, particularly Germany, and may make some investments in US companies.