Entertainment companies and shares can often be profitable investment options, but investors often overlook them, assuming that one has to be extremely rich to be able to invest in the sector. In order to be successful in such investments, you need to have an eye for good investments as well as having a lot of patience.

How to manage risk when investing in the entertainment sector

Investing in the entertainment sector can be quite risky, given how reliant it is on fan bases and trends. As such, you need to have a good risk management strategy when embarking on this type of investment.

It should be noted that shared risk, in the form of a mutual fund, is possible when investing in this sector. This mutual fund brings together into one large investment, that is professionally managed, all the funds contributed by hundreds or thousands of investors, and this investment is spread across several companies. As such, the investors do not have to put huge sums of money in one single “make or break” project that could spell financial ruin if it fails. Therefore, while the returns may not be as high, the risks tend to be manageable.

You can also invest in certain entertainment projects that inherently carry less risk, such as a musical’s initial production, an independent film, or the first recording session of a new band. Such investments are usually quite small in monetary value, and may still provide decent returns, especially if the productions go on to become big hits thereafter.

Wes Edens: a successful investor in the sports and entertainment industry

Wesley Edens is a principal, founder and Co-Chairman of the Board of Directors of Fortress Investment Group LLC. The company is an alternative asset management company worth $62 billion.

Wes Edens, together with Marc Lasry, acquired the Milwaukee Bucks in early 2014 for around $550 million. They are both keen to make a success of the team, just as Wes Edens has made a success of his investment banking career. According to Wes Edens on ESPN, this would involve bringing in talented new players, as well as propping up the business side of the team’s operations.

New investors can learn much from the lessons and successes that Wes Edens has gained as an investor in the sports industry. The biggest lesson is that with the right strategies, investing in the sports and entertainment sector can generate both long-term and substantial returns.

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