Tue, 06/10/2009 - 06:32
Media finance and consulting firm Noci Pictures is in discussions with US and international private equity partners in closing a USD300m dollar structured media and entertainment fund that would finance 20 to 30 films.
The firm says many hedge funds, including New York’s Elliott Associates, are seeing premium returns from investing in film and media.
"As a non correlated asset class, films and film finance has outperformed every non correlated asset class in the world," says Yuri Rutman, head of media finance and consulting firm Noci Pictures. "If you look at the more than USD6bn poured into motion picture finance deals in the last three years, the IRR across the spectrum for both studios and independents are resilient to global economic declines in other industries."
Rutman is optimistic about film as a superior growth oriented long term investment because its not based on regional factors and has a global base.
"When educated about properly structuring leveraged film finance which may also include US and international tax incentives to minimize the risk, many private bankers, sovereign wealth funds, high net worth investors, family offices, and pension plans understand that they are not gambling on one film hoping to win a film festival. When a company is looking to finance ten, 20, 40, 50 or 75 films there is more than just upside on revenues from each one but a final exit strategy after five to seven years that can bring 300-400 per cent returns on capital invested."
Rutman says he is attracting not only large scale private equity groups, but smaller retail investors as an alternative to oil and gas, real estate, stocks and commodities.
"The minimum participation used to be USD10,000,000 to get into deals, but we are scaling our strategies to accommodate the USD100,000-USD500,000 investors as well," he adds.
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