The fund has a market capitalization of $50 million with each founding members having a 20 percent stake.

The five founding member are: Vietnam's Yeah1 CMG, the country's leading movie production platform; Surfing Holdings; Green International, U.S.-based R&B Capital Group; and MBC Studio, a joint venture between Vietnam's MCV Corp and Japan's Asahi Broadcasting Group Holdings.

The fund will focus on cinema advertising and screen complexes, with a target on medium and long-term investments in the entertainment sector.

Nguyen Cao Tung, chief executive of Vietnam Entertainment Fund (VEF), said the fund will provide extensive financial support and standardize movie studios in Vietnam.

It will maximize profits for investors by increasing the capital value and dividend yield from initial investments, including the intellectual property of movies, and advertisements at theaters, Tung said.

He said that if the founding members work together, they can make 10 to 15 movies a year, without worrying too much about investment. Funds for each movie will range from 5 percent to as high as 45 percent, depending on producers' demands.

Tung also said that initially, the fund will offer a minimum dividend of 8 percent a year and a maximum of 10.5 percent. This dividend level could be maintained until 2022, he added.

Investors will be able to take part in movie projects, own movie theaters and run advertisements in these venues.

VEF expects to launch an IPO after five years, Tung said.

The fund will invest in an average of 20 film projects each year, providing support in capital, media and marketing consulting for producers, Nikkei said in a report last week.

It also plans advertising projects in 40 cinema complexes by 2020, and aims to acquire 10-40 percent stake in 40 cinema complexes this year and next, and own some complexes by 2020.

VEF, which was established in consultation with VinaCapital, the biggest investment fund in Vietnam, follows the model of entertainment funds in other countries, such as CA-Cygames Anime in Japan and Marvel Studios in the U.S., said the report.

According to VEF, the local movie industry’s estimated annual revenue is VND2.3 trillion ($98 million), but it is projected to grow 25 percent each year.

Imported movies, mainly from Hollywood, dominate the box office now. Vietnamese films account for about 20 percent of revenues.

At a meeting in October last year, Do Duy Anh, deputy head of the Vietnam Cinema Department said that a fund for the cinema business is necessary for the long-term development of the country's movie industry.

Nguyen Thi Hong Ngat, deputy head of the Vietnam Cinema Association, told the meeting that movie makers and artists had been longing for such a fund because funding from the state was too modest to make decent movies. Furthermore, most state investment was focused on movies with wartime and propadanda themes, she said.

The October meeting was held following disagreements between artists and the new investor in the national film studio.

The Vietnam Feature Film Studio, which was established by the government in 1953, put a 65 percent stake up for sale last year which was snapped up by the Hanoi-based Waterway Transportation Corporation in June 2017 for more than VND32 billion ($1.4 million).

In the aftermath of the sale, senior members of the studio said the company had no experience in the film industry and had failed to make good on promises to buy new equipment and start promotional campaigns.

The firm set a goal of producing one movie and one television series a year, which, according to artists, was far below the studio’s potential.

The company has also fallen short on payment promises.

The escalating dispute got the government involved, saying it will look again into the acquisition.

By Minh Nga - VnExpress.net - August 7, 2018