Private Equity Investors Looking For The Best Alternative Investment Or Pre-IPO Startup Eye Movies

March 23, 2012 - PRLog -- Recently, a consortium of China based film companies and private equity funds came to Hollywood to attract filmmakers & producers to come to China to make films.  Jack Selby, an ex PAY PAL executive recently started a $50 million film fund.  Larry Ellison of Oracle continues to pour hundreds of millions of dollars into his kids' film production company which financed the last Tom Cruise "Mission Impossible: Ghost Protocol" film.
And off course Jim Beyer, a prominent Venture Capitalist with Accel Partners invested in Legendary Pictures.

In January at the Sundance Film Festival, independent films that were purchased for millions of dollars by studio distributors usually gave investors 5-10x return on their investments.   And with the growing market of Video On Demand, investors are starting to see that movies are in fact the best alternative investment with the longest shelf life.

"Historically most film funds or investors were burned in film deals because their equity was stacked with senior and mezzanine debt that prevented investors from ever seeing a return" adds Yuri Rutman, CEO of NOCI PICTURES ENTERTAINMENT which structures risk minimized film investment opportunities for affluent investors and institutional capital.  "The other issue where investors lost money is that the films were either horrible, unwatchable, and had zero chance for U.S. theatrical distribution which really is a marketing platform for selling a movie to every country and every media in the world".

While a lot of investors are drawn to the vanity and glamor of Hollywood and partying with movie stars, its deals that are based on sizzle are the ones that end up sizzling.

"Ego investing is where investors lose money in anything, especially films", adds Rutman. "Our model is based on educating investors that you are not investing in movie premieres, Cannes film festival parties on yachts, or bogus monte-carlo simulation model.  We only work with sophisticated investors who look at the movie business as a manufacturing and distribution industry no different than making steel casings or pizza dough".

In the last few years a whose of prolific investors have entered the film business as long term equity plays.  The Pohlad Family (Minnesota Twins), Jeff Skoll (Ebay), Rickets Family (Ameritrade & Wrigley Field),Anil Ambani (Reliance),   Fred Smith (FEDEX), Norman Waitt (Gateway), Sidney Kimmel (Jones Apparel), Marc Cuban, Len Blavatnik, Thompson Family (Louisiana), Tim Headington (Texas) and numerous others including institutional investors such as Elliott Associates, Columbus Nova, Fortress, Honeywell Pensions, and others.

"What a lot of self made entrepreneurs and affluent investors are seeing is that chasing the next Groupon, Facebook, or other start-up company is a lottery play, investing in hedge funds or mutual funds is an emotional roller coaster ride, so investing in an industry that is more than 100 years old seems to be an intelligent alternative investment, " adds Rutman.  "And I think a lot of investors who are looking to be educated come to us at Noci (www.noci.com) because they understand our hedging models, risk minimization strategies, 100% transparency on equity allocations, and both our short and long term exits".