Designing an investment mechanism for the creative industries.

Client context

The client is an international cultural institution examining how financing can support cultural and creative businesses. The assignment explored the feasibility and operating requirements of a dedicated investment mechanism for Africa and the Middle East.

Context

Creative businesses often sit between two financing systems. Grants can support cultural production without requiring a financial return, while conventional investors may struggle to assess creative-sector risk, assets and growth models.

The assignment explored whether a dedicated investment mechanism could help bridge that gap.

What we did

PENCILS assessed the investment landscape for cultural and creative industries across Africa and the Middle East and examined the conditions required for a dedicated investment vehicle.

Workstreams

Investment landscape

Review of investment activity, relevant funds and financing mechanisms across Africa and the Middle East.

Creative-business needs

Assessment of the financing constraints faced by cultural and creative ventures at different stages of development.

Fund models

Comparison of venture capital, specialised sector funds, impact investment and other financing structures.

Investment thesis

Exploration of target-company profiles, investment stages, portfolio logic and possible financial and impact objectives.

Operating model

Assessment of governance, investment process, fund management, reporting requirements and the specialist capabilities required to operate such a vehicle.

Structuring

Legal and regulatory structuring questions were identified for treatment with qualified specialist expertise.

Outputs

Feasibility assessment

Investment-market benchmark

Investment-thesis options

Operating-model options

Impact framework

Structuring scenarios