Actively involved in providing finance for production in Ireland since 1990, Anglo Irish Bank is Ireland's leading Section 481 investment bank. With credits that include 'Intermission', 'Breakfast on Pluto', 'Tara Road' and 'The Wind that Shakes the Barley', the Bank raises Section 481 financing for Irish based productions for both cinema and television.
In our exclusive Q&A, IFTN talks risk returns, Irish production investment and Section 481 financing with Elaine Gill - chief Section 481 advisor at Anglo Irish Bank's HQ in Dublin.
Can you briefly explain the role Anglo Irish Bank plays in Irish film and television production?
Anglo Irish Bank provides a one stop shop approach to raising Section 481 funding for film and television productions that take place in Ireland. We raise these funds from individual investors and provide the banking facilities to these investors to facilitate their participation in the schemes. We have a database of investors that have invested with us over a number of years and continue to show an appetite for the Section 481 investments, our database is growing every year as demand grows.
What is the primary work that you do?
Personally, I would deal both with the Producers directly to agree that we would take on the mandate for Section 481 funding for their project - we will only take on a project if they meet our criteria - and once we are happy with that, we bring the investment proposal to our database of investors.
And what does that process involve?
Once the project has met our criteria we will proceed to send a mailshot to our database and ask if they're interested in investing. Then, generally over a three week period, I will liaise with the producers, legal advisors and tax advisors to ensure the final structure of the project and all legal arrangements comply with Section 481 legislation and satisfy bank security requirements. The shortest deal is finalised over approximately one month, but it can take longer depending on the complexity of the overall finance package for the project.
Can you tell us a bit about the range of projects you work on?
It varies. We've worked on TV drama, large US studio productions, independent feature films and animation. We'll work within each sector so long as the individual project satisfies our requirements.
And what might those requirements be?
It's difficult to summarise them in a couple of lines. We're concerned about the experience of the producer, completion guarantees, cash deposit to secure investors return, compliance with Revenue requirements, comfort on funding for the balance of the budget over and above the Section 481 investment to name but a few.
And do you accept new projects from unknown producers?
It really depends on how busy we are. We can accept new producers if they meet our requirements, but only if we have the capacity to do so. We already work with the majority of the producers in Ireland and as existing customers they are our top priority.
To date, what has been the largest project Anglo Irish Bank has worked on?
'The Tudors' this year, it has been singularly the largest fundraising that we've done reaching €21million. Discussions on the project began early in the year and the Section 481 transaction closed in June.
Did you find such a large scale project challenging?
It wasn't a difficult project from the perspective of the structure and finance because there is a very large US studio behind the project, Showtime. The Irish producers on 'The Tudors' are extremely experienced so it was also an easy process from that point of view. The challenge of handling €21million is that there are over 600 investors involved in the project. Dealing with such a large volume of investors for one project alone was tricky.
Do you have anything interesting in the pipeline?
We're nearly finished for the current tax year apart from a few small deals closing the beginning of November. We're looking forward to next year and there are a number of projects in the pipeline but I can't talk about them because they are in the preliminary stages. For us and the Irish industry, 2006 was a bumper year for film and television production and I'd expect the same for 2007, if not better.
In relation to Section 481 funding, is that the main area you work in - or are there other financial areas involved?
For film it's really Section 481 funding, we don't position ourselves outside of that. In reality, we're the largest provider of Section 481 funding in the country, that's where our expertise is and we're happy to stay that way.
What's involved in the 481 process and why is it advisable to involve Anglo Irish Bank?
What producers initially bring to us is their finance plan and overall budget. This details how it's going to be financed from various sources. They must also complete the submission and application to the Revenue - that can be highly complex.
Why come to Anglo? Anglo Irish Bank has a streamlined approach to Section 481 funding, we have the database of investors already available, we are in a position to provide the required lending and we have the experience to see the project from the beginning to delivery stage. We in effect provide the one stop shop approach to Section 481 fundraising. We have been in the business now successfully for over eight years and so have accumulated a lot of experience at this stage and I think that matters a great deal both to our investors and to producers.
Where do these investors come from, what is their background?
The majority, say 60%, would be regular PAYE workers and the balance would be self employed.
If you were coming to me off the street and you said 'I've heard about film deals? What do I need to do?' I'd explain firstly that you need to be sure first off that you can capture this investment at your top tax rate, then you need to be aware of the risks associated with the investment. Once they get comfortable on these two issues we run through the figures and explain how over a relatively short period ( 6 - 12 month period) the investment produces a return of €2,095. I would also always advise the investor to carefully read all of the documents available to them.
The main risks associated with the investment are (1) that the project will fully comply with the tax legislation and so provide the expected tax relief and (2) that the project is completed and delivered to a nominated distributor / broadcaster.
And how do investors react to this risk?
Our investors rely on the bank to carry out the required due diligence on both the project and producer to be comfortable that we can then recommend this project for investment. We only deal with producers that meet our requirements and most of whom we've successfully dealt with over a number of years. We have our own risk criteria that must be met on each production and the investors that have been investing with us over the years rely on our experience in this area.
What advantages are there for financiers investing in Irish productions?
They get a kick from investing in the film industry. Honestly, they're in it for financial gain, but given the choice to invest in a car park or a film, and the risk reward was the same in both instances, then I believe people would choose the film. They enjoy supporting this industry and going to see the film when it's released in the cinemas, seeing it on the big screen.
In terms of risk, how stable is investing in Irish production at this time?
I invest in it every year. So that's the best endorsement I can offer.
For further info contact Elaine Gill at Anglo Irish Bank - Tel: 353 1 616 2174 or Email: elainegill@angloirishbank.ie. www.angloirishbank.ie
