German film production fund VIP has struck a strategic co-investment partnership with London-based financier Brass Hat Films whereby Brass Hat will now act as the manager of the fund's investments.

VIP has completely restructured following German taxation law changes and the criminal proceedings against Andreas Grosch and Andreas Schmid, the former managers of VIP Medienfonds, which administered the film investments for the fund's subscribers.

The fund is now run by Dirk Specht, who was brought in earlier this year by shareholders to reorganize the operations and handle the investments of the money still unspent by VIP.

Specht pacted with Brass Hat to act as media advisor to the fund and Brass Hat will now select the projects, close the documentation, and monitor the projects through the production phase and commercial exploitation. VIP and Brass Hat have $200m earmarked for production funding.

Sales veteran Glenn Kendrick Ackermann will handle foreign sales for all upcoming productions which do not have third party sales agents attached.

'After some turbulent times for German funds and in particular also for VIP, we are looking forward to achieving the best possible opportunities for our investors,' said Specht. 'The partnership with Brass Hat gives us the opportunity to strengthen VIP's position in the international film production market.'

'We are thrilled to be in partnership with Germany's leading film production fund and are convinced that the increasing hesitation of the US hedge funds provides the perfect entry point for single picture financiers such as VIP and Brass Hat Films', added Brass Hat CEO Lars Sylvest.

Sylvest and Specht are planning a trip to LA in October to meet with production companies in regards to the new VIP operation.

'We are looking at the German funds with the same rationale as we would making hardcore equity investments,' said Sylvest. 'We want to make our money back and make profit on the investment.'

'We will look at two kinds of projects: films in the late stages of development and early stages of packaging, and projects which are relatively far down the road and we can come in and close the financing.'

Brass Hat, which was founded by Sylvest and Nick Hamson in 2004, has become a leading UK financier for non-tax driven film investments. It is involved in slate deals and sole trader financing, and has an enduring relationship with Ashok Amritraj's LA-based Hyde Park Entertainment with which it has co-financed titles such as Premonition, Death Sentence, Dreamer, Shopgirl and Trade.

VIP has backed more than 50 films in the last five years with a combined production volume of over $1bn including Monster, Perfume, The Punisher, Lord Of War and Stormbreaker.

Meanwhile separate trials are expected to take place before the end of the year for Grosch and Schmid who have been charged with tax evasion and embezzlement in relation to the marketing and administration of funds VIP Medienfonds 3 and 4. Schmid has been held in custody since Oct 2005.