Benjamin Waisbren doesn't mince words when he weighs up the film business from a financier's point of view (and using financiers' parlance).

'Film is a wonderful, iconic art form; it's not a great asset class,' says the president and CEO of new film financing operation Continental Entertainment Group (CEG).

'Because it's not liquid, it's not transparent, it's really not predictable. It's a difficult, very challenging asset class.'

So why does he want to be in such a tricky business'

'Because if you're a problem solver and you understand the fundamentals of specialty finance or deal-making you can do well.

Because it isdifficult, if you provide a service to your counter-parties you're going to create enterprise value and that's incredibly valuable.'

Launched last April - and originally headed by Initial Entertainment Group (IEG) co-founder Colin Cotter, who has since left the company - CEG is backed by private equity from financial services giant Citi.

With offices in New York, Los Angeles and Paris, it has two operating units: Continental Entertainment Capital (CEC) does single picture financing, structured financing and institutional transactions; and Continental Pictures, which has a second look agreement with IEG, is designed to acquire distribution rights and exploit them through IEG's sales operation.

Because it makes direct investments rather than acting as a syndicator, CEG has to treat its customers well, Waisbren explains.

'The first order of business for us,' he says, 'is to do what we say we're going to do when we said we were going to do it. It's the credibility factor. Our credibility has got to be our raison d'etre.'

The customers that have been named so far include the Weinstein Company, in whose $285m Asian film fund CEC is participating; Odd Lot Entertainment, whose Frank Miller project The Spirit is the beneficiary of CEC's first single picture financing deal; and European sales and distribution outfit Wild Bunch.

With the latter, CEC signed a deal last September under which it provided the majority of a 25m Euro equity infusion for Paris-based Wild Bunch and formed a 110m Euro joint venture - dubbed Continental Films - with the company to acquire and co-produce features.

Waisbren puts his close association with Wild Bunch (he signed a similar deal with the company in his previous job) down to a number of factors.
'They are film industry managers that know more than we do,' he explains.

'They are very, very cost conscious. They have great taste for the global market. They're honest as the day is long.'

The company's business model, meanwhile, is attractive 'because it's a pan-European roll-up strategy.' Wild Bunch, he says, 'is a global company dealing with a global market.'

The association recently got even closer when Yann Le Quellec, co-founder and COO of Wild Bunch's advisory arm EWB Finance, merged that operation into CEC Europe and became head of CEG's new Paris office.

CEG's initial deals illustrate an investment philosophy that rests on working closely and actively with distribution or production company counter-parties.

'First and foremost, we are not a passive investor,' Waisbren asserts.

'Second, our value is to exploit our ability to originate direct investments without the leakage of significant fees to intermediaries and other dealers. You want to get as close to the creation of the value chain as possible.

'Third, we're in the risk management business, because the measure of success in our business is to do serial transactions over a multi-year period and get the money back.'

Waisbren does not believe, however, that the kind of financial models used by some film investors are the best way to manage risk.

'I do not believe that Monte Carlo simulations [an analytic technique sometimes used to predict box office performance] are reliable predictors of the performance of a slate,' he says.

Instead, he prefers to align CEG's interests with those of its customers - in bad times as well as good.

'We never want to see our counter-party make money when we're losing money,' he says. 'We have to figure out a way that if we're going to suffer, you're going to suffer. That's your best predictor - their own greed and their own fear.'

CEG is giving Waisbren a second run in the film business after his not always happy initial experience.

As managing director of hedge fund Stark Investments, the attorney-turned-financial executive set up Virtual Studios, the banner that invested in IEG and Wild Bunch but also in a group of Warner Bros films that included high profile flop Poseidon.

Waisbren, who was fired by Stark soon after Poseidon's release, says that Virtual's relationship with Warner 'was not allowed to play itself out.'

The sailing hasn't been entirely smooth for CEG either, with Citi recently revealing a $10bn fourth quarter loss and widespread job cuts.

But the good news, says Waisbren, is that 'our budget's approved for 2008, we're a profitable business and we've got the mandate from a global financial institution that's still a money centre bank [a large bank dealing with governments, corporations and other banks].'

In fact, Waisbren suggests, with the sub-prime lending crisis making it harder for hedge funds to operate in the film industry, CEG - which is not, he stresses, a hedge fund - is now well positioned for growth.

Besides the $150m acquisition fund handled by Continental Pictures, CEC has already underwritten commitments of around $400m, he says, and 'we have four or five transactions that are on the rails right now for this quarter.'

And in dollar terms, Waisbren adds, at least half of the company's business is being done outside the US.

'Our mandate is to be a global force dominating market share,' says the New York-based CEG chief.

Benjamin Waisbren is keynote speaker at Screen International's European Film Finance and Sales Summit in Berlin on 7th February.