To manage risk, Cloth’s strategy is to lend to multiple projects, secure the backing of top studios, and surround himself with trusted people -- including a team of ex-investment bankers. His clients include Canadian pension funds, high net-worth family offices and individuals.

“We focus on being an alternative debt shop,” Cloth said. “We’re an asset-backed lender, we just happen to take intellectual property as the asset, the collateral for our loans. Within every pension, there is a small allocation for alternatives and trust me, we are as alternative as you’re going to get.”

Unlikely Start

The Toronto native started his career as a fixed-income economist at Canadian Imperial Bank of Commerce, but left to start an alternative investment company focused on high-yielding assets not correlated to markets. It was there he was approached by two men to loan C$20 million ($15 million) to launch a new Canadian artist. “After I stopped laughing,” he said, he decided to invest a more modest sum in the artist known as The Weeknd.

It was Cloth’s only deal in the music industry, but it helped introduce him to people in film and television, a sphere to which he’d always been drawn, and led to the start of Creative Wealth. One of the first films he backed was indie flick “Tumbledown” with Bron Studios, who he’s now closely partnered with.

“We came to an understanding: I can bring you all the capital you need to grow, but when things go off kilter, which they do in the film world, I need the studio to stand behind me,” Cloth said.

Starting off with $5 million in loans from friends and family, Creative Wealth now has a $300 million debt fund and a $300 million equity fund.

Debt Fund

In an environment of shrinking bond yields, Cloth said he’s got investors knocking on the door. The financier is aiming to boost his debt fund to $750 million by the first quarter of next year, including an additional debt raise with Canaccord Genuity Corp. for $200 million. He said he’s also in talks with other big studios for an additional equity fund.

Partnering with Bron has helped Creative Wealth win financing rights to several big hits, including “Joker,” the Batman-less tale cowritten by director Todd Phillips about how a failed comedian got so twisted.