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Londoners Investing in Film…and Making Money

You wouldn’t necessarily assume that David Beckham, Ryan Giggs, Gary Lineker, Dame Clara Furse (former chief executive of the London Stock Exchange) and Robin Budengerg (chairman of the UK Financial Investments) have anything in common. However, they are all investors of the film fund called Ingenious Film Partners 2 LLP and they stand to make a great deal of money from this enterprise.

Ingenious Film Partners 2 LLP

Ingenious Film Partners 2 LLP is a film fund that created Avatar, James Cameron’s record breaking film, Die Hard 4 with Bruce Willis, and the yet-to-be-released movie for the book Life of Pi.

There are over 1350 people who have made themselves members of the film fund over the past five years, all of whom collectively resigned last month to take advantage of the tax relief that the UK offers for investing in creative industries. The members will still receive payouts based on rights and marketing income that the films generate.

As of April 2010, the fund had raised $2bn from investors for film production and distribution, $1.2bn of which it returned to its members last month.

Investing in Films

Do these numbers show that the rest of us should run out and invest in films? According to James Clayton, the chief executive on Ingenious Investments, “Film can be a very high-risk business. But high-net-worth investors who want a diversified portfolio and good risk-adjusted returns can often be better off investing in the underlying cashflows of content instead of investing in listed media stocks.”

He said, as well, that the film business, while not “recession proof” is definitely “recession resistant.”

Other Londoners who may benefit from Avatar’s success include Philippa Rose, Piero Novelli, Ken Costa, Pierre Lagrange, Simon Machenzie-Smith and Mark Aedy.