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A silver screen investment

The July/August issue of Families in Business features an in-depth look at investments of passion. In this exclusive preview, Bruce Love talks to film investment fund founder Francesco Juilland about his passion for film and how he has made it into a shrewd investment.

From a very early age, Francesco Juilland had a love of film. Son of Emy and Joseph Juilland, one of the most respected families in the publishing industry in Europe, Francesco grew up with film and through his family's friends and social networks was visiting movie sets in Switzerland and Italy from a very early age.

"It really is the longest love story of my life. Motion pictures are something I grew up enamoured by," he says. "Even in my teens I got to know a number of producers and would go exploring on the sets, spying on the actors and crew. For a young boy, a film set is an exciting place, full of wonder and glamour."

At the age of 18, he had the opportunity to work with cult director Monte Hellman, who has made a number of inventive offbeat films, including Ride in the Whirlwind, starring Oscar-winner Jack Nicholson (pictured), who also wrote the film.

After earning his spurs in the Italian film industry, Francesco made his way to Hollywood, where he worked as an executive producer.

"From day one in Hollywood it was abundantly clear to me that film, first and foremost, is an industry," he says. "The creativity and the talent is wonderful, but the business behind the finished product is just as
important."

In 1987 he co-founded the film production enterprise Iguana. The company produced the critically acclaimed film Iguana, directed by Monte Hellman.

Since then, Francesco has launched a film investment fund. Through his investment company 8 Dragons, he has launched an investment vehicle for people to invest in Hollywood movies. Looking to raise around $200 million to $300 million, he is targeting studios like Lionsgate, MGM, United Artists and Miramax.

Francesco says that for budding film investors, it is often difficult to choose the right projects to invest in.

"The numbers behind any given film are extremely complex. There are a lot of factors to consider, not just who are the stars and who is the director."

For any potential project, Francesco says it is important to "run the numbers" to make sure the idea is viable and a potential moneymaker.

"You take the initial premise and try to calculate the potential audience. Then you add the 'talent' factor - which stars would most likely attract your target audience? Next you calculate the production costs and potential distribution revenues. If the lowest figures will make you a profit, then you decide whether or not to invest."

But Francesco warns against direct investment into films unless you truly know the business inside out. He believes that the many tax schemes offered in some countries to attract investment into film are not the way for first timers to invest.

"These schemes attract what is known in the industry as 'damp money'," he says. "They have attracted a lot of money but often the investor does not understand what the investment entails. They have little or no control over how their money is being used or where it goes. You need to know how the industry works, otherwise you are just throwing your money away."

In any film investment, Francesco always makes sure that he is aware of the costs and is not cut out of the distribution process: "visibility on costs lets you monitor your investment and access to the distribution deal means you are not cut out of the revenue side of the business."

He says the reason why he set up his film investment fund was to provide a safe environment for investors and so that he had enough leverage to keep control of distribution rights.

"Investing in film is a truly awarding experience," says Francesco. "But you need to enter it with your eyes wide open."

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