A pair of investment firms sprung up last week with aims to finance entertainment-related ventures geared toward the next generation of consumers.
Vision Venture Partners of Beverly Hills, which made its formal debut last week, plans to invest in the e-sports, digital entertainment, and food and beverage sectors. The private equity firm was co-founded by Stratton Sclavos, former chief executive of Verisign Inc.; Amit Raizada, former chief executive of Spectrum Business Ventures; retired Los Angeles Lakers star Rick Fox; and Jace Hall, a film and TV producer.
The company has already sunk $15 million to $20 million of its partners’ money in several companies, including e-sports franchise Echo Fox of Beverly Hills, production company Vision Entertainment, and e-sports record-keeping company Twin Galaxies of Banning, Sclavos said.
“The four of us have been friends for a while,” he said. “We decided it would be fun to put together a (private equity) fund that focused on a new generation of content.”
The firm plans to invest $300 million to $500 million over the next five years, according to Sclavos. Rather than raising one large fund, each Vision deal will be funded through an individual investment vehicle made up of money contributed by the partners as well as outside sources.
The company’s portfolio thus far is largely built on the efforts of Fox, who launched Echo Fox in 2015 after buying a franchise in the “League of Legends” Championship Series, and Hall, whose TV and film production company, HD Films of North Hollywood, was rebranded as Vision Entertainment.
Fox said he was inspired to enter the e-sports industry after being introduced to it by his college-age son.
“I discovered this generation (of competitors) that had bubbled up to the surface,” he said. “It really had ignited my past experience through professional sports.”
As an example of how the companies in Vision Ventures’ portfolio might work together, the company is producing a one-hour televised video-game tournament that is scheduled to air on the CW television channel this Thursday. The program is produced by Vision Entertainment and will feature e-sports players from Echo Fox.
Vision Entertainment plans to dedicate 80 percent of its production efforts to e-sports-related content going forward. Vision Ventures plans to support those efforts at its 30,000-square foot Beverly Hills office, which features three production studios and an e-sports training facility.
Century City’s Struans Capital Partners, which launched last week, also has its eye on the future.
Chief Executive and Managing Partner George Malasek said his firm’s investing strategy was partially inspired by the media habits of his children.
“I’ve got my own R&D department at home with my 16- and 17-year-old daughters,” he said. “Watching how they consume media is really eye-opening. They would never watch cable. Everything they do is through Netflix or YouTube or social media.”
Malasek and co-founder John Cole previously invested together in reality TV and independent film projects through Struans Media Inc. of Carlsbad.
“We’ve done more traditional entertainment project financing in the past,” said Cole, who serves as chief operating officer and managing partner. “But we’ve recognized the need to pivot as the market changes.”
With the shifting market in mind, the company plans to plow about 80 percent of its fund into new-media outlets and has already made investments of undisclosed amounts in Long Beach production facility Thunder Studios and Pigmental Studios, an animation shop in Washington, D.C.
Struans Capital, which bills itself as a merchant bank, is eyeing a variety of different deal types including equity, debt, and mezzanine financing. The firm plans to invest $150 million across 10 to 20 projects over the next 12 to 18 months. The firm is particularly interested in e-sports and virtual reality opportunities.
“(Virtual reality) is really interesting,” Malasek said. “We’re very much an experience-driven economy now and virtual reality plays right into that.”