Systematix creates $66 mn media fund with former AION partner Parth Gandhi

 Systematix creates $66 mn media fund with former AION partner Parth Gandhi

Mumbai-based financial services group Systematix has brought on board Parth Gandhi, former co-head of AION Capital Partners, to float a media and entertainment-centric investment fund.

The India Media Entertainment Fund (IMEF) aims to raise Rs 500 crore ($66 million) to invest in filmed content (short as well as long-format), besides live entertainment as well as media and entertainment technology ventures.

The firm will chase both equity and structured finance deals in the sector.

On the filmed content side, the fund would look at structured debt with an equity upside and would target an estimated annualised return of 12%. For live entertainment, the fund would look at equity as well as structured debt and chase annualised return of 18%. For media and entertainment tech firms, it would look at picking up straight equity stakes with an eye on 20% annual returns.

The private equity fund, which registered as a category II alternative investment fund last month, counts Systematix Group founder CP Khandelwal and his son Nikhil as well as Gandhi as founders and senior partners.

Gandhi quit as senior partner and managing director at AION Capital in September 2020. AION was a special situations investment joint venture between Apollo Global and ICICI Venture. AION co-head Kalpesh Kikani had also quit the firm at the time and was named head of Piramal Group’s alternative investment business earlier this year.

This was after ICICI Venture and Apollo decided in mid-2020 to terminate their nine-year-old joint venture as they planned to invest separately. As part of the arrangement, Apollo affiliates now manage AION. Gandhi had joined AION Capital when it was formed in 2011. Previously, he was president at ICICI Venture.

AION Capital had raised $825 million for its first special situations-focussed fund. At its peak, the AION fund had invested in 12 companies. Eight of those were minority investments, whether via debt or equity capital. The remaining four were buyouts.

The India Media Entertainment Fund’s advisory board includes adman Prahlad Kakkar, actor Radikaa Sarathkumar, who is also founder of Radaan Mediaworks, and Rajesh Gupta, managing partner at law firm SNG & Partners.

The advisory board also includes banker Ramnath Pradeep, former chairman of Corporation Bank; and Venky Mysore, CEO of actor Shah Rukh Khan’s Red Chillies Entertainment and the chief of IPL team Kolkata Knight Riders.

Private equity and venture funding in the media and entertainment field has been largely limited to tech firms like those in social media, digital news aggregation and streaming businesses.

Another sector-focused investor in the field is KKR-backed Emerald Media. There also have been some special purpose acquisition company (SPAC) moves in the sector.

Singapore-based media and entertainment company Vistas Media, which is backed by Indian filmmakers Abyanand Singh and Saurabh Gupta, struck a deal this year in the Middle East with Anghami. Vistas Media, which has produced several Indian films including Bahubali-2 and Amitabh Bachchan’s AB Aani CD, is launching a $150-million fund that will invest in blank cheque companies and media businesses across the Middle East and North Africa region.

In a similar development, Reliance Entertainment group CEO Shibasish Sarkar had floated a SPAC to raise money via a listing on the Nasdaq stock exchange.

In the past, a few others like Religare had floated a media sector private investment fund but that did not create any splash.

Vivek Sinha

The Capital Quest