Insights, Passion Investing - 27.03.2020

Blockbusters as an asset



New film concepts like "Game of Thrones" are becoming more and more popular these days. The traditional investment world should keep an eye on this trend. Read an English version of a GENTWO guest article, published in the “Finanz und Wirtschaft” special edition “Institutionelles Anlegen”.

According to industry experts, "Narcos", "Succession" and "The Handmaid's Tale" are among the promising newcomers of an arising film and TV era. The reason is the growing demand for such high-quality content. Can the Hollywood industry also be a solution for investors providing potential returns in times when interests are low? Well, films and series can represent a real investment alternative. Not only do they offer return potential, but they also behave uncorrelated to classic asset classes. But how can film projects be converted into assets and integrated into a portfolio?

The recently securitized film project strategy (by Barry Films) is a good example. The international film production company, based in Los Angeles, Zurich and Berlin, has specialized in the global film market over the past twelve years and is now considered a pioneer of the new investment category "films and series". Barry Films' investment strategy, which is available to professional investors, focuses on the enormous demand for content in the entertainment industry. It invests in the development and packaging phase of outstanding films and series. Traditional film investment opportunities are typically based on downstream production financing, which means that the related risk must be taken by investors. In contrast, Barry Films’ packaging strategy only focuses on what happens before the start of the actual production phase, which includes activities like securing material, writing the screenplays and casting the actors.

As soon as the package is sold to a studio, it already becomes a success for the investment strategy - regardless of how the film or series is ultimately received by the audience. At the moment the risky production starts, the invested amount and a defined bonus (which reflects the income of the investment) have already been returned into the strategy, generating a potential increase in value. The “Barry Films” investment strategy is a so-called non-bankable asset, which is based on an Actively Managed Certificate (AMC) with Swiss ISIN code. This next-generation financial product was launched using a new type of “off-balance-sheet” securitization set-up. The latter enables financial intermediaries to easily integrate and manage all their blockbuster assets - not just films - into a traditional investment portfolio.

Author: Sandra Chattopadhyay, GENTWO

(This is the English version of a German guest article that appeared in the Finanz und Wirtschaft special edition “Institutionelles Anlagen on 14 March 2020.)

 

Click on the picture to get to the “Finanz und Wirtschaft” special edition “Institutionelles Anlegen” (in German): 

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Click on the video and listen to what Barry Films' co-founder Benito Mueller says about his film strategy and GENTWO's added value (in English):

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