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Lights, Camera, Profit

Joining the growing number of CFOs lured away to hedge fund firms, the finance director behind The Queen is financing films and running the show.
Jason KaraianDecember 21, 2006

Flush with cash and never short on confidence, hedge funds are luring finance chiefs away from their corporate confines in increasing numbers. Fred Watt, the former finance director of Royal Bank of Scotland, recently joined the board of fund manager Old Oak Holdings, while Naguib Kheraj, who announced his resignation as finance chief of Barclays Bank in October, is widely rumoured to be on the lookout for a private equity or hedge fund appointment.

But landing a hedge fund gig isn’t the exclusive domain of CFOs in the financial services sector. With more money chasing fewer opportunities, funds now want to develop new specialisations, seeking fresh talent with financial acumen and experience in specific industries.

This is what led the partners at Aramid Capital to Simon Fawcett. Fawcett spent eight years as finance director of the UK arm of Pathé, the French film company, overseeing the production and distribution of films like the highly acclaimed The Queen.

Having climbed as high as he could at the company, the finance chief jumped at the chance, in September, to run a new film finance hedge fund launched by the London-based firm. Fawcett was first approached by Aramid’s partners, a trio of high-powered British and American film financiers, in early 2006. “I had all the tools and knowledge necessary to operate in the field, and it was an appealing opportunity to run a venture rather than simply being the CFO,” Fawcett says. “It’s exciting to start with just an idea and an empty room.”

Financially speaking, film is a fickle business. Aramid’s fund, however, takes the uncertainty out of the process with the help of a recent change to the UK’s tax code. Producers now receive a tax credit of around 20% for whatever they spend in the country. Because the credit can only be claimed after a film is finished, Aramid will lend producers money up front in return for the subsequent credits.

Fawcett is currently hopping between London and Los Angeles, courting investors for the Cayman Islands-based fund. During these trips, “I enjoy reading a script if I know that I’m providing finance for the film, but it’s never a reliable indicator of whether it will be a success or not,” he says. Targeting a 20% annual return, Fawcett is selling his fund in the manner of Gordon Gekko, the infamous corporate raider in Wall Street, the quintessential film about the pursuit of profit, who famously said: “I don’t throw darts. I bet on sure things.”