Investment Strategy
Independent film and television production needs funding between financial close and delivery. By then, much of the budget is committed on paper through tax incentives and distribution contracts, but the cash arrives later. We provide the credit that bridges that gap.
Our loans are secured against certified tax incentives, signed distribution contracts and unsold rights.
Protect the downside. Every loan is built around verified collateral, a completion bond, an independent collection account and first ranking security.
Lend against contracts. Repayment comes from contracted cash flows rather than box office performance.
Stay selective. From about 400 projects reviewed each year, 4 to 5 are financed.
For more on how we approach the asset class, read Align's interviews with altii and Alternative Credit Investor.
Risk and Underwriting
We lend against collateral we can verify, on terms we control, and we stay involved until the loan is repaid.
01 SELECTION
From about 400 projects submitted to us each year, 4 to 5 are financed.
02 TAX CREDITS
Certified incentives in the UK, EEA, US states, Australia, New Zealand and Canada. Eligibility is confirmed by an auditor opinion and we advance at a discount to the certified value.
03 PRESALES
Signed contracts only, assigned to Align by notice, with deposits paid at signing. Advance rates are set by territory and counterparty grade.
04 GAP
Sized on conservative sales estimates for unsold territories and capped per project and across the book. Selected genres only, cross collateralised with our senior loans on the same film.
05 PORTFOLIO LIMITS
Concentration limits per production, per tax authority, per distributor and per sales agent. No loan runs beyond 24 months.
Protections on every loan
01 COMPLETION BOND
Every production we finance is completion bonded. A completion bond is a guarantee from a specialist insurer that the film will be finished and delivered as agreed. If it is not, the guarantor steps in to complete the film or repays the financiers.
02 COLLECTION ACCOUNT
All sales revenues are paid into an independent collection account run by a third party. It pays out in a fixed order agreed by all parties at closing, known as the waterfall, so no producer or sales agent handles the money first.
03 INTEREST RESERVE
Interest is reserved in cash at disbursement.
04 SECURITY
First ranking security over receivables, accounts and film rights.
05 CURRENCY
Loans are matched to the collateral currency or hedged at offer.
06 CONTROL
Align leads the legal closing and approves every sale.
07 CROSS COLLATERAL
All our loans on the same film are cross collateralised.
Key risks and how we manage them
01 TAX CREDITS
A credit is certified below expectation or paid late. We rely on an auditor opinion, advance at a discount, hold timing buffers in the reserve and lend only against sovereign obligors.
02 DISTRIBUTORS
A distributor fails, renegotiates or pays late. We take signed contracts with notice of assignment and deposits, grade every counterparty, spread each loan across several contracts and substitute the sale on default.
03 DELIVERY
The film is late or not completed. Every production is completion bonded and our team oversees cost reports and delivery.
04 GAP SALES
Unsold territories sell for less, or later. We use conservative estimates, hard caps and genre exclusions, and we approve every sale.
05 CURRENCY
The collateral currency moves against the loan. Currency is matched or hedged at offer.
06 CONCENTRATION
Too much exposure to one film, authority or counterparty. Portfolio limits are tested at every new loan.
Governance and servicing
01 CREDIT COMMITTEE
A four-member credit committee approves every loan. Every approval is unanimous.
02 PRODUCTION OVERSIGHT
Our in-house team monitors cost reports, delivery and the completion bond, with approvals on cut, cast and budget.
03 COLLECTIONS
Receivables are assigned to us by notice. If a distributor defaults, the rights are resold to a new buyer.
These measures reduce risk. They do not remove it.