A Walkers team led by Group Partner Leanne Wallser along with senior associate Joseph Barker-Willis, advised on the law of a new fund. Entitled ‘Productivity Media Inc’, the fund’s target market will include Canadian, American, United Kingdom, French, German, Maltese, Australian and New Zealand film and television producers (as well as film and television producers from other jurisdictions) with budgets in the range of $2 million to $50 million.

In this feature article, Head of Funds for Jersey Finance, Elliot Refson, speaks to Leanne Wallser along with Jacqueline O’Mahony of Productivity Media about their decision to use Jersey.




Jacqueline O’Mahony, Productivity Media Jaqueline, which jurisdictions did you consider while making your decision and, ultimately, why did you choose Jersey?

“We considered both Bermuda and Jersey. There were a number of reasons we choose Jersey.

PMI have known the Jersey Finance team for some years and when we contacted them about the process of setting up the fund in Jersey, they were very responsive and guided us to the right structure. The team at Jersey Finance have been very helpful throughout the process and have been in contact with us throughout the setting up of the fund to ensure we had all the assistance we needed.

The Jersey Private Fund (JPF) structure is ideally suited to our strategy as our focus is on accredited investors such as family offices, discretionary fund managers and advisers.

Jersey is a well trusted jurisdiction for investors and in this instance our seed investor is familiar with Jersey. Another important fact to choose Jersey is the ability to market into other popular EU countries as well as Switzerland.”

Tell us more about the fund, what it seeks to achieve and its target market?

“PMI has completed over CAD$93.0 million in transactions. PMI has consistently returned high yields since inception offering true diversification with the benefit of being uncorrelated to markets and has built an 8+ years track record.

We have a distinctive offering for investors who are looking for diversification within their portfolios and an uncorrelated strategy. Target investors are family offices, discretionary fund managers, asset managers and advisors to trusts.

The fund’s strategy is to provide senior secured debt using investment grade sovereign receivables and distribution rights as collateral in the independent film and television production sector. The fund’s target market will predominately focus on Canadian, American, United Kingdom, Australian and New Zealand productions. Through our deep knowledge of the independent film and TV sector we have identified that there is a significant opportunity for a non-bank to provide senior secured debt in this sector.

PMI does not take any box office or equity risk. The assets we lend against are the government incentives and distribution rights not the film.  The exit on all loans is on completion of the project and as such, all projects must have a completion guarantee prior to the loan being provided. Insurers are rated A to AA and the underwriters mainly Lloyds or Allianz.”

Leanne Wallser, Group Partner, Walkers Leanne, tell us about the fund structure, why Jersey and what regime worked best for you?

“The fund is one of an increasing number of what we at Walkers are terming “hybrids” – they are open-ended corporate funds, but with only quarterly or monthly dealing days, so no daily or weekly NAV calculations to factor in. This structure has proven to be one of the most popular type of fund structures we are being asked for at the moment and works particularly well as a Jersey Private Fund because managers benefit from the light-touch regulation, and investors benefit from the Jersey kitemark and also the flexibility and liquidity demanded in the current economic climate.

These hybrid open-ended funds are typically established as Jersey private limited companies with flexible terms and the ability to issue different classes of shares, potentially with preferential rights for early investors if required.”


What were the timescales and costs involved in setting up the structure?
“From  structuring through to launch, the media fund took approximately six months to set up – there was a lot of work involved, we reviewed and advised on different structuring options from the outset, and of course assisted the client in discussing their proposals with a number of service providers to find the best fit. We also worked with onshore counsel Osborne Clarke in respect of AIFMD filings so that the fund could be marketed into the UK and Switzerland in accordance with the applicable national private placement regimes (NPPRs).”

How did this compare to other jurisdictions?
“Jersey’s reputation carries a long way, and to a large extent, we find that managers are keen to use Jersey structures because this effectively gives them a kitemark for proper levels of governance and regulation, access to a knowledgeable and professional company administration, accounting and legal market, both of which in turn gives investors comfort and certainty.”

Can you give us an overview of why the Jersey Private Fund regime worked so well?
“On this occasion both the promoter and the seed investor were already very familiar with the jurisdiction, and were aware of the growing trend towards the use of JPF structures. The key was that they were looking to focus on accredited investors such as institutions, family offices, and discretionary fund managers – so the cap on the number of investors was not an issue for them. The flexibility and inexpensiveness of the JPF remain a major draw for fund managers and promoters, along with the ability to market into the more popular EU states such as the UK using the light touch NPPR routes from an AIFMD perspective, as well as non-EU countries like Switzerland.”

What role have local administrators played in the structure?
“The service provider – in this case Apex Fund and Corporate Services (Jersey) Limited – is fundamental to the running of the fund, as they take responsibility for carrying out due diligence on the promoter and/or the adviser, and ensuring they have the requisite experience, giving confirmations to the JFSC in their capacity as ‘designated service provider’ to the fund under the JPF regime, and collating relevant due diligence and KYC on investors.  They are responsible for ensuring that the fund is compliant with the Jersey AML regulatory obligations and continues to operate in compliance with the JPF guide.”

How have you worked together with Jersey Finance on this deal?
“We haven’t worked directly with Jersey Finance on this deal, but that’s not to say that we – and our client – haven’t benefitted from their work. The ongoing awareness-building campaigns by Jersey Finance about the JPF in particular have effectively broadcast the key messages to the market about the JPF kitemark, about the speed to market, and about the light-touch regime – more and more, we find that contacts and clients are very familiar with the structure before we start to get into the details.”


Overview of the scenario

Walkers advised Productivity Media Inc on its international media fund launch. The fund’s strategy is to provide senior secured debt using investment grade sovereign receivables and distribution rights as collateral in the independent film and television production sector. The fund’s target market will include Canadian, American, United Kingdom, Australian and New Zealand productions (as well as film and television producers from other jurisdictions.

The Jersey solution

The fund was established as an open-ended corporate fund regulated under the Jersey Private Fund regime.

Benefits of the Jersey solution

The main benefits are the Jersey kitemark as a positive sign to investors, low cost to establish and light-touch regulatory regime.

Walkers ›

“We were introduced to Walkers by a London based partner named Beaulieu Capital whose principals have worked with Walkers on previous transactions. In addition, the PMI team were familiar with Walkers as they knew some of the London based Walkers team. We are very happy with the work of Walkers on our set up in Jersey and look forward to a long and continued relationship with them.”

–  Andrew Chang-Sang, President & CFO of PMI