MediaInvest, a new E.U. equity tool managed by the European Investment Fund which targets the audiovisual industry with €400 million ($424 million) over 2022-27, has made its first deal: An equity agreement with France’s Logical Content Ventures, part of Logical Pictures. 

Under its InvestEU CCS Guarantee scheme, the E.U. has also struck three debt financing agreements, with Spain’s Cersa and CREA and Luxembourg-based The Archers. 

Announced at the San Sebastian, the agreements are worth a total of €68.25 million ($72.35 million). They are expected to leverage around €500 million ($530 million) of new financing for audiovisual and creative companies and projects.

MediaInvest “will strengthen the financial capacities of European companies, enable them to get better value for the intellectual property they create and in turn boost their growth and international exposure,” Renate Nikolay, European Commission deputy director-general for DG CNECT, told Variety. 

Launched in Cannes last year by Commissioner Thierry Bréton, one of MediaInvest’s ultimate goals is to encourage the creation of audiovisual equity funds.

Given the intense due diligence conducted by the EIF on any company receiving E.U. moneys, its funding can have a cascade effect, attracting investment from private-sector third parties, Logical Pictures president Fréderic Fiore explained to “Variety”.

The EIF will invest €25 million ($26.5 million) in Logical Content Ventures. Benefiting from a co-investment partnership with France’s Pathé, LCV aims to raise up to €70 million ($74.2 million) in equity investment in European audiovisual production and distribution companies. “Very flexible,” said Fiore, LCV invests against worldwide rights, recouping from international minimum guarantees, as well as P&A for a films domestic market release. 

Its investment strategy, Fiore explained to “Variety”, is that while the international theatrical value of films has plummeted over the last two decades, thanks to the VOD explosion, movies’ total value in the international market place has increased.

The EIF has also signed with MDDG, a new Luxembourg-based fund, acting as a general partner of its investment vehicles The Archers and The Archers Production. MDDG is specialised in investments in the audiovisual sector, mainly financing co-production of films and TV series. The EIF €8.25 million ($8.75 million) guarantee line aims to leverage a portfolio of around €50 million ($53 million) in financing.

The Archers is also financing against international, its head, David Grumbach, also president of Bac Films, said, calling the EIF finance “a game changer.” 

Under the InvestEU CCS Guarantee, the EIF has also inked a €20 million ($21.2 million) guarantee line with Compañía Española de Reafianzamiento (Cersa), a Spanish non-profit promotional counter-guarantee institution which underwrites other bank loan guarantee institutions in Spain and targets all cultural and creatives sectors.

The support is expected to leverage a portfolio of around €230 million ($243.8 million) of counter-guarantees, enabling the network of Spanish mutual guarantee institutions to offer enhanced access to finance in the cultural and creative sectors in Spain (including film, theatre, video game production, music and performance, and editorial fields).

Madrid-based CREA, a private-sector mutual guarantee institution focusing on SMEs and mid-caps audiovisual companies, will benefit from an €15 million ($15.9 million) EIF guarantee line. With Cersa as a coordination entity, that is expected to leverage a portfolio of around €145 million ($153.7 million) of guarantees.

John Hopewell, Callum McLennan