Global Cool Events LLP, an open-ended unregulated collective investment scheme, will fund the expansion of Global Cool’s activities into a single-strategy investment: music concerts and similar international entertainment events. The July Mandela 4664 Concert, the International Indian Film Academy Awards and Maroon 5’s world tour are already involving Global Cool, which has enlisted the support of ex-concert promoters involved in organising large events such as T in the Park and has commitments from Sienna Miller, Orlando Bloom, K T Tunstall, Josh Hartnett, Scissors Sisters and other high-profile entertainment names.
All the artists donate their time for free and all the associated rights are held with a rights company wholly owned by the charity.
“We are hoping to reach minimum subscription and deploy capital by mid-summer,” said Julian Knight, Global Cool’s chairman and CEO. “We have already acquired the licence for what is intended to be a fairly large live event in the autumn, yield on which is anticipated to be in the high 20 per cent region.”
The fund will have a five-year lifecyle, and is targeting an annualised return of around 56 per cent, net of fees – which are minimal as they cover only administration costs.
“This is the most effective way of deploying investor capital, but also raising money for the foundation in a scalable way,” said Mr Knight.
Eighty-five per cent of the profits will return to the Global Cool Foundation to be invested in technology and research.
“In the charity world, that’s quite a payback – normally these things operate on a 70/30 split,” said Mr Knight. “The Global Cool Events assets are turned four times a year. Essentially you are putting on four large events annually.
“It takes about three months from deployment to cashing in from the event, so it is fairly quick, and as you make more money that 15 per cent of the profits is carried back to keep on swelling the pot. In year one you will be deploying about £45m but by year five you are deploying around about £140m. There is no lock-up at all. Essentially it is a five-year investment, and beyond that the plan is to IPO Global Cool Ltd, perhaps on AIM, but there is no lock-up.”
Mr Knight confirmed that, despite the source of returns being entertainment revenue, Global Cool Events LLP does qualify as an environmentally-sustainable investment program.
Mr Knight was previously a senior employee at hedge fund giant Man Group, which has supported Global Cool since inception and
is an initial investor in the fund. Former CEO Stanley Fink is on the board as a special financial adviser. This backing should give institutional investors “a large degree of comfort”, said Mr Knight.
The fund will raise up to $100m, with the minimum subscription set at $100,000, and according to Mr Knight there is already a strong level of tacit commitments.
“We already have quite a lot of interest globally from the institutional investment community,” he said. “We have a contracted team working with consultants which has approached about 200 institutional investors. Also, self-managed pension schemes are looking at this, not only for the tax efficiencies it provides but also for the performance aspects it has and the strong environmental biases.”
MS
