Parth Gandhi, former co-head of AION Capital Partners, is set to float a media and entertainment-centric investment fund in a joint venture with Mumbai-based financial services group Systematix. 

The India Media Entertainment Fund (IMEF) aims to raise Rs 500 crore ($66 million) to invest in the technology-enabled media and entertainment space, according to two people familiar with the fund. 

“The segments of interest include live events, short video content, over the top streaming (OTT), gaming, artificial intelligence backed virtual reality products. The fund is bullish on virtual reality and augmented reality in the technology space of the media and entertainment sector… Human mind will always require entertainment,” one of the persons cited above said. 

“While the pandemic saw live theatre and live events go down, OTT went up, the spends on entertainment continued…the demand for entertainment will remain even while patterns change and gaming is going to explode,” the person added. 

IMEF, a 50:50 partnership between Gandhi and Systematix, intends to make investments with average ticket size ranging between Rs 5 crore and Rs 50 crore making both equity and structured finance investments in the sector. 

It will be a blend of equity and structured products and instruments like non-convertible debentures (NCDs), compulsorily convertible preference shares (CCPS), compulsory convertible debentures (CCDs) and preferred equity, said a person aware of the development. 

It is likely to raise the entire corpus in one tranche before the end of December. Business Standard first reported this on Monday. 

Gandhi quit as senior partner and managing director at AION Capital in September last year after the nine-year old joint venture between Indian private equity firm ICICI Venture and US-based Apollo Global Management Inc ended starting April 2020. 

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 these dozen were minority investments, whether via debt or equity capital. The remaining four were buyouts. For now, the fund continues to hold investments in five-six companies. 

The fund’s advisory board includes marquee names such as adman Prahlad Kakkar, CEO of actor Shah Rukh Khan’s Red Chillies Entertainment Venky Mysore, who is also the chief of IPL cricket team Kolkata Knight Riders. 

The board also counts banker Ramnath Pradeep, former chairman of Corporation Bank, actor Radikaa Sarathkumar, who is also founder of Radaan Mediaworks and Rajesh Gupta, managing partner at law firm SNG & Partners as members. 

Private equity and venture funding in the media and entertainment field has been largely limited to large funds such as global private equity player KKR-backed Emerald Media investing in technology firms related to social media, digital news aggregation and streaming businesses. 

A few years ago, Chinese internet conglomerate Tencent Holdings Ltd had made a bet in Indian music streaming service Gaana, incubated by Times Internet, the digital business arm of media conglomerate Bennett, Coleman and Company Ltd (BCCL) that runs several market-leading newspapers such as The Times of India and The Economic Times as well as TV news channels.  

In July 2015, Saavn had raised $100 million in Series C funding from existing investor Tiger Global Management and others and a year later received funds from Guy Oseary, CEO of talent management agency Maverick Records.  

Paytm founder Vijay Shekhar Sharma along with venture capital firms Blume Ventures and Accel Partners has previously invested in Bengaluru-based technology news portal FactorDaily, which later also received funding from Freshworks promoter Girish Mathrubootham. 

Digital news portal The Print led by senior journalist Shekhar Gupta had raised from Tata Sons chairman emeritus Ratan Tata. Similarly, subscription-based news startup The Ken raised and The Morning Context have also received funding.