At MM Global Movies, risk management is of paramount importance to minimize investment risks. To this end, risk elements of bridge lending have been mapped and covered by adequate control measures. Care and transparency are central. This way, every investor knows in advance how his capital will be handled, what risks there are and what returns can be expected. In addition, investors are regularly kept informed of developments and results.
In order to reduce the risks, the financing application for each film project must meet the requirements set by MM Global Movies. MM Global Movies only invests if all requirements are met. For example, there must have been done adequate pre-sales which guarantee revenues, and there must be a binding commitment that production will actually take place. The other points are further explained and detailled in the brochure. Request it HERE. The procedures for setting up and running a bridge fund are very strict and bound by laws and regulations. In addition, the capital is invested in several movies at the same time, which reduces the risk.
As with any investment, there is always a risk of loss of capital. In film projects there are a number of scenarios that can theoretically endanger the project yields. Although it has not yet resulted in losses in any project so far, it cannot be ruled out, despite the carefully designed safety net. Two such scenarios are shown below. Other scenarios are further explained in the brochure.
Drop of dollar exchange rate
Because investments are made in dollars, this has a direct effect on the results for the investor if conversion takes place to euros. In this case, in consultation with the investor, the conversion is not carried out and a better price point is awaited. Another option is not to distribute the proceeds but to reinvest them, also known as compounding.
Main funding arrive later than planned
There is no risk in that case. The bridging is extended by a few weeks and generates more interest.