Fund to tap 'recession-proof' entertainment

LONDON (Reuters) - Specialist fund manager Aramid Capital Partners said on Monday it had launched a fund providing loans to producers, distributors and libraries of film, TV and music.

"Films will keep being made and in that instance it's definitely recession-proof," Sean Flanagan, co-founder of Aramid, told Reuters.

Aramid aims to raise $250 million (161 million pounds) with the new fund and will target annual returns of 12 to 15 percent by providing medium to long-term loans secured against tax credits, revenue participation rights, distribution rights, underlying copyright, sales contracts and other receivables.

Aramid's first fund, which provides short-term financing for film projects, delivered returns of over 20 percent in 2007 and is up 9 percent so far this year.

Film and other cheap forms of entertainment are often seen as recession-proof. Amid the market chaos in mid-September J.P. Morgan finalised two film-related financings totally nearly $1 billion.

"We're seeing demand from investors around the world mostly because they're looking for un-correlated niche strategies," Flanagan said.

"It's quite hard to find things to invest in at the moment," he said.

The MSCI World Index has fallen nearly 30 percent in the last month amid fears of a global economic recession.

(Reporting by James Molony, editing by Will Waterman)