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Investment Funds

Fund Capitalization and Audiovisual Sector Governance - FUNCINE


Banco Nacional do Desenvolvimento Econômico e Social (BNDES), as developer of the Brazilian economy, has structured the fund “Fundo de Capitalização e Governança do Setor Audiovisual – Fundo de Financiamento da Indústria Cinematográfica Nacional – FUNCINE” (FCGSA FUNCINE) with the main objective of investing in Brazilian media companies to finance and develop the sector:


To be the first consolidator of leading media content producers in Brazil resulting in a Major Media Company with premium products, which will accelerate the industry to an unprecedented growth rate and profitability.


Media Content:

Five senior professionals with over 30 years of experience in PE and Media. The Team is totally committed to high standards of governance, meritocracy and transparency in actions/reporting

Assured Investment Strategy Continuity:

Value Adding:

Manager K&C Investimentos Ltda
Administrator BRL Trust DTVM
Legal Structure FUNCINE, Instruction CVM #398 – Approvals by CVM and ANCINE
Capital BRL 80 million
Term 9 year - closed end fund:
• Investment period: 4 years
• 5 years to divest
• a 2-year extension in the divestment period can be approved by Shareholders in a General Meeting
Portfolio 10 to 15 companies
Maximum stake 49% of the shares issued by invested corporation
Independent Auditor Ernst & Young Terco
Fund’s Strategy • Shared control
• Independent Auditor review
• High governance through Board Members
• Pre-established vetoes
• Power to nominate the CFO and or the Financial Manager/Controller
• Mandatory drag-along to Holding
Investment Focus • High margin products
• Cinema/TV/Internet extended life span products (vault development)
• Technology
• Synergy and complementary features in the portfolio
Diversification rules • Investment of up to 40% of the Fund’s committed capital per economic group
• In the divestment period, the Fund will be allowed to concentrate up to 100% of its investments in a Holding with potential to make an IPO at BOVESPA.
Governance Investment Committee: a Board with 7 members; 2 non-voting members will be nominated by K&C and up to 5 voting members to be nominated by the investors. Committee's decision will need a 2/3 majority
Shareholders General Meeting (“AGQ”). To deliberate over conflicts of interests
Management Fee 3.5% per year over the Fund’s net worth
Performance Fee / Carried Interest • 20% in excess of IGPM (inflation index) + 6% per year (the “Hurdle Rate”)
Full Clawback provision: Carried interest will only be paid to the Fund’s Manager after 100% of the Committed Capital plus Hurdle Rate is repaid to the investor
Capital Commitments • BRL 1.5 million by K&C’s partners (Aprox. USD 0,75 MM)
• BRL 48,5 million by other investors (Aprox. USD 25 MM)
Capital Commitments by BNDES BRL 30 million (Aprox. USD 15 MM)