Background

The client is an investment fund specialising in the development of film and TV productions and has an investor base across the globe. Following the initial investment in these productions, the firm collects royalties throughout the year and distributes it annually at a set moment, which results in an increase in cash balances over time. The investors who provide financing to these film ventures require security over the accounts as a prerequisite for their financing.

Challenge

The client was facing 3 main challenges with its existing transactional setup:

Operational inefficiency

The manager needs 30+ accounts in multiple (offshore) jurisdictions for the funds and operational entities. In some cases, multiple accounts are required for a single legal entity in order to split royalty streams. However, no single bank could easily provide accounts to this fund across different jurisdictions, which has led to operational inefficiencies and duplication of KYC requests. The handling of several different bank account providers caused delays in internal transfers and the need for more streamlined processes to improve overall efficiency.

Inability to get security over accounts

As the manager was being serviced as a regular corporate client in some jurisdictions where its funds were domiciled, the banks did not offer the service to acknowledge security over its accounts in favour of its investors. This led to some potential investors not being willing to provide financing.

Inadequate cash management

The manager on average holds significant cash balances as the income from royalties is collected throughout the year and distributed only once a year. The banks the manager was using provided either fixed-term deposits, which the manager is not allowed to use in its investment mandate, or only paid interest above a minimum level of cash balances held, which is not met due to the balances being spread out over several banks.

Our solution

Ebury helped the fund migrate from its existing set-up and opened transactional accounts for various funds, their SPVs, and the GP across several jurisdictions. Intragroup transactions between the accounts are processed instantly. This is how it benefited the fund:

• Streamlined process: A single transactional payments provider for the entire structure resulted in uniform client onboarding and streamlined KYC requests.
• Efficient cash management: Cash balances held with Ebury are reimbursed each month, and they are instantly accessible in accordance with the fund’s investment mandate.
• Security on accounts: For the accounts where the main balances are held, Ebury has acknowledged the pledges to provide security for the investors.
• Account statement and reporting functionality 
• Incorporation of new entities: A blocking certificate was issued to reflect the fund’s capital increase, allowing new entities to be incorporated for future ventures.

Let’s start a conversation

Get in touch with our experts to discuss the needs of your fund and how Ebury can help you. You can also visit our page to learn more about our solution.

Disclaimer

The information provided herein is general in nature and should not be construed as financial or investment advice. The information provided here is not legally binding. The information, data or views expressed here is for the exclusive use of the recipient and is subject to changes without any notice. You may ask the support team or your dedicated relationship manager to provide additional information regarding Ebury products.