Nicola Horlick: From hedge funds to Hollywood

The 'superwoman' of the Square Mile, is expanding her portfolio. Now she's making films, but it's still all about money, she tells Nick Clark

Readers of the financial pages will be well aware of Nicola Horlick, the superstar fund manager who landed the nickname "superwoman" as she juggled a high-powered career with raising six children. She appears less regularly in the arts section, but that is set to change as her new money-making venture has Hollywood in its sights.

Horlick may be more comfortable in the Square Mile than Pinewood, but she believes her expertise in running portfolios and assessing risk can prove lucrative when applied to film-making. This is no Damascene conversion from the world of finance to the creative arts, as some in the City experienced in the wake of the crash. "It's all about making money," she says.

Derby Street Films was launched in 2010 to specialise in development, taking an idea and delivering a script with talent attached. "It's very important for us to choose good-quality projects. We don't need a string of Oscar winners, but they must be commercial", says Horlick. "It is important to have a good script, a good director and producer and a good cast. Otherwise, it wouldn't work."

The company plans to distil the process of development, and, in this, Horlick's expertise is crucial. "We bring something to it because we understand about building portfolios, diversification, we're spreading the money across projects, we're mitigating risk. All of our portfolio management skills come in to it."

Her husband, Martin Baker, a former financial journalist and novelist, compared the company's strategy to the Oscar-nominated film Moneyball, in which a baseball manager picks players according to mathematical criteria.

"It's just like Billy Beane choosing only the guys who get to first base," Baker says. "He doesn't care how they do it, he's only interested in those who get there." Derby Street will not necessarily have to work with the greatest producers in the world, he says, "but producers who have a strike rate of 80 per cent making it into a movie. If something gets made, the investors get paid." The cheque arrives on the first day of principal photography.

Derby Street Films raised £1.5m from wealthy individuals and is now developing nine film projects. The initial projects include Queen of Diamonds, a gangster film set in 1960s London, with Catherine Hardwicke, director of the first Twilight film, at the helm.

There is also In the Blood with Haywire star Gina Carano possibly attached and Arabian Nights overseen by The Scorpion King director, Chuck Russell, and several other ideas that remain closely guarded. Horlick is currently raising money for a second Derby Street Films company, to fund more projects.

The company is deliberately targeting America. The niche for development funding is not so exaggerated in the UK, says Horlick, with support from BBC Films, Film4 and the British Film Institute. Horlick said. "It is weird: there is plenty of money for production in the US, but not development. We have a free run at it, and can get involved with some of the world's top producers."

The numbers are compelling, and she knows them by rote. "There were 1.3 billion cinema tickets sold in the US alone, compared to 300 million for sporting events and 100 million for theme parks," she reels off. "If you think there are only 300 million people there it shows how deeply ingrained in the culture film is. It is a massive industry.

"The big six studios in the US now don't make that many films. Therefore, the independent sector has grown phenomenally. A cottage industry has sprung up. That's why there's an opportunity to make money." Now 80 per cent of the 1,000 English-speaking films made every year are done so independently, she says. "That gives rise to an opportunity. There are many people out there trying to get their projects off the ground."

She adds: "It's terribly complicated what we're doing and is terribly hard to copy, so no one has. I think we'll end up being the development house for Hollywood."

The ambitions do not end there and the company is expanding into a more hands-on role, producing five of its current projects. "Our aim is to end up being a production house with a development arm," she says. "We will be on set and I'm not sure how we're going to do that with so many films."

Horlick herself would make the subject of a fascinating film. She could have been an actress, but took up a place at Oxford rather than the Royal Academy of Dramatic Art, and "somehow I was swept into the City", marking the end of her involvement in drama.

She was a director at S G Warburg at 28, turned around the fortunes of Morgan Grenfell Investment Management in the early 1990s but later had a dramatic falling out with the management. It culminated in her flying the company's headquarters in Frankfurt in 1997 after rumours she was to defect saw her suspended. She arrived with 40 journalists in tow to demand her job back, but the attempt failed.

She subsequently launched two asset management firms and was among the most recognised women in the City. She also has direct experience of one of the villains of the financial crisis when her company Bramdean Alternatives had exposure to Bernie Madoff's Ponzi scheme. She has now stepped away from fund management. Beyond Derby Street, she set up a private equity business and is also preparing to open a restaurant called Georgina's in memory of her daughter who died of leukaemia, aged 12.

Horlick's involvement in film started with a few personal investments at the turn of the century but she found it unsatisfying. She found a niche in film scores and the company now owns the rights to 150 including those of The King's Speech, The Woman in Black and Harry Brown. "People saw what we were doing, saw it was a relatively easy way to make money and started competing," Horlick says. "We decided to step sideways into film but do something different."

They were advised to move into development. "You need to be in the right bit of the film industry to make money, and there are these little niches. Music was a niche, development is a niche."

Derby Street Films uses the tax-efficient Enterprise Investment Scheme from HM Revenue & Customs, yet Horlick believes the Government needs to do much more to foster the huge creative industry in the UK. "The tax environment in the UK needs to be looked at. Britain had the Harry Potter dividend. Warner Brothers spent an enormous amount of money shooting those films here. That has now come to an end," she says. "We have a huge skill base and high production values, everything is fantastic. We have enormous amount of talent but the volume will reduce."

Under the current regime, the company will look to shoot abroad in locations with better tax breaks. "There's a very good case for the Government doing something more for film. We wouldn't bother going to Cologne if we were getting better tax breaks here. That would bring in a lot of business into the UK."

The financial crisis has sparked a series of films dramatising events in the City and on Wall Street. Horlick does not think much of the recent crop of movies including Margin Call – "irritating" – and Wall Street 2 – "terrible. The original film remains the high water mark of finance movies."

Her husband wrote a book set against the crisis, which is currently in development, although not by Derby Street "as it would be a conflict of interest". Meanwhile, Horlick is not keen to shrug off the vestiges of her life in the City just yet: "I would really like to make a film about finance. One that succeeds and informs without either patronising or mystifying everyone as to what the hell it's about. Although that's pretty hard."