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A dynamic investment house finds a way to bankroll up-and-coming talent.
BOGOTA, Colombia — In high school, Rodrigo Guerrero managed to persuade his teacher to let him make videos instead of turning in written papers.
“It was more entertaining,” he said.
Now, the 36-year-old convinces investors to fund his cinematic ventures.
Guerrero, is a co-founder of Dynamo Capital, the first private-equity fund in Colombia dedicated to producing films.
Film is a risky industry, with more flops than hits.
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To interest investors, Dynamo had a simple appeal: the company lowered the risk by investing clients’ money in a slate of movies, instead of just one big production.
So far, Dynamo has raised $10 million. It has co-financed and co-produced eight feature films, with another two or three in the pipeline.
"The Hidden Face," or "La Cara Oculta," a thriller produced with Fox International Productions, played in Spain, where it was released this fall. It’s on its way to Colombia early next year.
Last year, “Undertow,” which Dynamo underwrote with French, Peruvian and German production houses, was released to critical acclaim in theaters in several countries and picked up awards at festivals, including Sundance.
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Opportunities for film production in Colombia were few when Guerrero was growing up. There were no film programs in universities. Funds to make films were so scarce most filmmakers had to look abroad.
He spent 10 years studying and working in the film industry in New York, and landed an associate producer job on the acclaimed film "Maria Full of Grace."
Back in Colombia in 2004, for the film’s premier, Guerrero realized that things in his home country had changed.
A new generation of filmmakers was injecting an unstoppable energy into the under-developed industry.
Perhaps more importantly, new tax incentive programs from the government were helping it along.
The filmmakers just needed more capital to get their movies going.
“I realized there was an opportunity to set up a private-equity film fund in Colombia, because there was no such thing,” he said.
He brought together a team of 30-something film industry and investment banking professionals, including Andi Baiz, a high-school pal who worked with him on movies in high school, to launch Dynamo Capital in 2006.
Then, the government made a decision to allow domestic pension funds to invest in local private-equity managers. That was key to getting Guerrero’s idea off the ground because it boosted the investment climate in the country. “When that came through, we became an option,” said Guerrero.
But Colombia’s film industry needs more than money to grow.
Competition from English-language films and a distribution market that remains largely domestic further complicate efforts to get Colombian films produced and screened for audiences.
So, Dynamo Capital also has begun to experiment with different ways of producing and distributing Spanish-language films outside Hollywood networks. “If you’re not a part of that, you’re figuring out how to make it work,” Guerrero said.
To expand their market, Dynamo, with the exception of one purely made-in-Colombia film, only seeks international co-productions, largely with Spain and Mexico. The company finances about 20-40 percent of the films they co-produce.
In a country where an abundance of pirated videos have suppressed any market for legal video sales, Dynamo was the first company to release a film on DVD (Satanas, Colombia’s 2008 submission to the Oscars) for a few dollars, to make it competitive.
Dynamo is also moving into video-on-demand, as more viewers abandon the theater to watch movies on their computers.
Guerrero says Dynamo also aims to move beyond the big screen, exploring new film-production territory that is largely chartered by young, energetic filmmakers and “where surprises can actually happen.”
In part to reach them, Dynamo is also raising money for a new $150 million-$200 million private-equity fund geared towards Latin American production houses to foster film production outside of Dynamo.
“We’re talking about this new generation who was born with Facebook, who was born with Twitter, and they’re promoting their movie even before they’re making it,” he said.