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AFM: The Exchange, Forest Road Launching Film-TV Fund (EXCLUSIVE)

In a deal reached at the American Film MarketThe Exchange and Forest Road are in final discussions to partner on a long-term film and television fund, Variety has learned exclusively.

The companies made the announcement Nov. 4 on the fourth day of AFM after working together on Hannah Marks and Joey Power’s upcoming feature “Shotgun,” a comedy-drama starring Marisa Tomei, Gina Gershon and Maika Monroe.

The fund, which is yet to be named, will be investing in independent film and television productions through the newly formed joint venture and be co-managed by The Exchange and Forest Road executives. It will have offices both in New York and Los Angeles.

The Exchange, which has handled sales on “Shimmer Lake,” “The Spectacular Now” and “A Street Cat Named Bob,” will sell some of the fund’s projects, but not all. The sole purpose is to lend capital to responsible production companies at below-market rates in a seamless manner.

Forest Road offers low-cost financing options for tax-related collateral for a variety of industries. The partnership should accelerate its expansion into independent film and television financing.

“Diversification and flexibility will be the key to our success,” said Brian O’Shea, CEO of The Exchange. “Within the last year, we have hired a veteran studio producer and started our own production label, and secured a line of credit for film acquisition purposes with Pacific Mercantile. Adding a film fund is a good next step, which allows growth of our core business of film production, financing and licensing.”

The Exchange is selling its first original production, “Septillion to One,” along with “A Girl From Mogadishu,” starring Barkhad Abdi, and “Flower,” starring Adam Scott, Kathryn Hahn and Zoey Deutch.

“We have been fortunate enough to put an all-star team together in the beginning of 2017 and after working with The Exchange, all of the synergies between our two businesses was quickly apparent,” said Zachary Tarica, founder of Forest Road Co. “Creating this structure will allow us to utilize The Exchange for their industry know-how and production capabilities and couple it with our lending expertise. Stocks are at all-time highs, interest rates are at historical lows, and we see tremendous potential in investing in debt securities that are uncorrelated to the public market and diversifying our shareholders assets.”

O’Shea and Caddy Vanasirikul from The Exchange and Tarica from Forest Road are negotiated the deal.

 

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