Munich-based leasing company Hannover Leasing (HL) has established a $150m (DM350.5m) fund to finance the third installment in New Line Cinema's $270m The Lord Of The Rings trilogy, The Return Of The King, which Peter Jackson is directing.

Private German individuals looking for a way to reduce their tax burden in the last months of the financial year are invited to invest a minimum of $43,000 (DM100,000) in the fund with 56.4% of the investment being provided by a trustee on the investors' behalf.

In its 20 years of existence, HL, whose major shareholders are the Hessen-Thuringian Landesbank and IV Holding, has handled $4.5bn (DM10.5bn) from private and institutional investors in various forms of leasing fund.

This is HL's first media fund although it planned one year ago to set up a fund for Universal, but cried off at the last minute because of uncertainty about the future of private film funds under proposed new tax legislation.

According to insiders in the investment world, changes to German tax laws, with the imminent passing of the long anticipated media decree (Medienerlass), will mean that the days of the leasing model are numbered and it will no longer be possible from next year.

In the meantime, US studios such as New Line and Paramount are making the most of the lucrative source of finance from Germany for as long as they can.

For example, Munich-based Alcas' (previously known as KG Allgemeine Leasing) Munich Film Partners is behind a leasing fund with a total investment volume of $255m (DM591.6m), which is set to produce Shooter, an adaptation of the Stephen Hunter novel set in the world of the secret service, among other projects.