Monday, 2 March 2015
Last updated 4 hours ago
Apr 7 2010 | 5:45pm ET
A Los Angeles firm has launched a film fund designed to break even before a movie has earned even a penny from distribution.
Bennett Global Entertainment’s Dual Return Investment Fund will produce independent films with an eye towards immediate dividend payments to investors. According to the firm, investors will actually start receiving payments before and during film production, thanks to its risk management policies.
“Independent producers are taking a beating in today’s tough economic climate,” says Michael Bennett, founder and CEO of Bennett Global Entertainment. “Equity investors are fleeing in droves. Foreign pre-sales agreements with minimum guarantees and debt financing has all but dried up for the Indie producer so it’s become an imperative that we create a new financing model and protect the finance engine that makes what we do possible. I have heard all the horror stories and have known for sometime that the financing models as currently constructed are inadequate for today’s realities and need to be fixed.”
“In research of the independent film industry I found there was not really any quantifiable, risk-management strategies in place for equity investors,” said John Manley of hedge fund Market Evolutions, which is partnering with BGE on the new fund.
Manley’s model has produced returns of 162% over the past four-and-a-half years.
“These returns are outstanding in any market, but are particularly impressive given what’s happened to the global economy over the past few years,” Bennett said. “Even during the disaster of 2008 when the Standard & Poor’s 500 Index contracted by 38%, Manley’s fund generated positive returns of 28%.”
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…