Investing in entertainment: Turning your hobby into a promising portfolio
Investing in entertainment can be quite a profitable venture if done correctly. This is where you as an investor can turn your hobby into a promising portfolio. Your hobby may be movies, music or sports, and getting involved in the investment side of something you love may provide not only financial reward, but also great personal satisfaction.
Risk management in entertainment sector investments
When undertaking investments in the entertainment sector, it is important to have a good risk management strategy. This is because some of the investments may be capital intensive, and a return may be dependent on factors that are beyond an investor’s control such as unpredictable critical reviews, public acceptance, etc.
One way of minimizing risk is sharing it through mutual funds where resources from many investors are pooled together in one investment that is managed by a range of companies. The investment put in by each individual investor is thus a manageable sum, and, in the case of failure, will not result in too much of a loss for the investor.
Certain entertainment projects are also less risky than others, especially when the players are still relatively new to the entertainment scene. As such, you may choose to invest in a band that is launching its first album, or a film by an independent producer whose budget will not be as big as that of a Hollywood blockbuster, or even in the production of a new musical by an unknown writer. The loss would be minimal if the production is not successful, but it can be very profitable if turns out to be a hit with the public.
Wesley Edens: new owner of the Milwaukee Bucks
Wesley Edens, a successful investment banker and principal and founder of Fortress Investment Group LLC, has also ventured into the world of sports entertainment. He recently bought the Milwaukee Bucks, together with Marc Lasry, and is determined to turn into a big name in the American NBA. Even though the investment the duo had to make is quite large, they have devised good strategies to ensure they make a handsome return on their money. These include revamping the team and developing its business operations side.
The lessons that Wesley Edens has learnt in his acquisition of the Milwaukee Bucks can help many new investors discover the right way to go about investing in the entertainment sector, so that they can also make a success of their investments.