The Federal Reserve's gloomy Economy forecast has Portfolio Managers, Hedge Funds, Private Bankers, & Affluent HNW Angel investors benefiting in participating in a top alternative investment opportunities in film which can create jobs in the U.S. & help stimulate the economy.
While many investors, private equity funds, and hedge funds are chasing investment opportunities thinking they may be the next Facebook, Groupon, or sexy hedge fund with crazy returns, the reality is most of these investments are far and few in between and reserved for a small group of investors which creates a gap for many Angel Investors. Unfortunately, a lot of investors end up investing in the "leftovers" and third tier startups that go nowhere.
Yuri Rutman, CEO of Noci noci.com which structures and advises on risk minimized film financing for investors offers that "As a non correlated investment, film production and distribution outperforms all other alternative non-correlated opportunities".
Rutman's Chicago based company is setting the stage in educating interested investors, family offices, money managers, wealth advisers, private bankers, financial advisers, fund of funds, hedge fund managers, and private equity groups on why investing in the film business is really an investment into a manufacturing and distribution company
"Investing in film is really an investment into a manufacturing industry that has short and long term value in terms of tax benefits, global tax credits that are monetized as cash and flow to investors, job creation, multiple-revenue streams, and varying degrees of exit strategies. If you combine the different incentives, cash rebates, leverage some pre-sales on large films, you can see a 50-100% ROI on your investment before actual revenues", Rutman adds".
Recently, Fortress Investments, one of the biggest private equity groups bought out the initial investors of Legendary Pictures which may have included Honeywell Pension Funds, MC Ventures, Arbry Partners, and others.
"Its not just the dentist or plastic surgeon looking for a vanity investment", states Rutman. "When self made billionaires like Fred Smith of FEDEX or hedge funds like Elliott Associates are investing in films, the question that every investor needs to ask is 'why'?"
Apart from the investors mentioned above, many other CEO's, family offices, and institutions in this space include Larry Ellison Of Oracle (and his son David Ellison and daughter Megan Ellison), Norman Waitt( Gateway Computers), Jeff Skoll (Ebay), Marc Turtletaub (The Money Store), Sidney Kimmel (Jones Apparel Group), Minnesota Twins owner Bill Pohlad; and, financiers Robert Sturm, Sheikh Waleed Al Ibrahim, Len Balavtnik, Anil Ambani, and Philip Anschutz .
"What we are also scaling and educating investors on, that an investment in film is risky if the pipeline for distribution is a gamble","Rutman continues. "In our model, our equity reserve guarantees a theatrical release whether its on 100 screens or 3000 screens which give investors a higher level of transparency in revenues".
"I don't know of any other alternative investment that can offer tax incentives, multiple exit strategies, as well as giving back to the local economy, while being involved with the moviemaking process", states Rutman, the head of Noci Pictures. " I don't even know of any business that someone can start where they know they will receive an exact ROI before they see any profits".
"I am also surprised how many investors, hedge funds, VC, tax planners, CPA's, tax attorneys, public and private companies have no clue about these benefits", Rutman adds. "Federal Preservation, New Markets Tax Credits, etc was the usual route for tax credit planning or alternative investments, but film production incentives offer more premium and equity upside.
"I think what investors are finally starting to realize is that investing in a movie company or film fund is like investing in a mutual fund", states Rutman "Each film takes a life on its own as a standalone company but the difference is unlike hedge funds, mutual funds, or other alternatives, there is no correlation to whether the S&P's, stocks, or oil prices are going up and down. Plus our business model addresses the one key missing link when it comes to investing in film and that is theatrical distribution"