High net worth individuals, hedge funds and private equity funds will play a bigger role in financing the entertainment industry in the future, according to a report by the accounting and advisory firm Rothstein Kass.

The organisation drew its conclusions from a survey fo 141 production company executives carried out in the first three months of this year. It showed that almost two thirds (63 per cent) of respondents said attracting name talent to a project was vital in attracting finance and more than three quarters said this would be critical in the next three years.

The findings chime with evidence that as traditional sources of banking finance in the movie industry have become harder to find amid the financial turbulence, investment funds and other sources are being tapped for areas such as “gap” financing. For example, a Cayman-registered fund operating in this area is the Aramid Entertainment Fund. This fund has been involved with films such as W, How to Lose Friends and Alienate People, In the Loop, Bronson and Edge of Love. FilmHedge, a Danish fund operated by QED Financial Engineering, invests in domestic movies, offering capital-protected returns in the sector. Even before the credit crunch took hold, actor Tom Cruise approached private equity funds to help finance films back in 2006. Such developments highlight how traditional dividing lines in financial markets have become blurred.

"Hedge funds, private equity funds and HNW families have long been important sources of capital and our survey findings indicate that these investors will play an even greater role in entertainment finance three years from now,” Rick Flynn, a Principal in the Family Office Group at Rothstein Kass, said.

The findings of the survey are carried in a report entitled Behind the Scenes.

“The alternative investment community is using its increased influence to demand access to projects backed by star-power, recognizing that these are the productions that have the greatest chance of success," Flynn said.

"Astute investors, however, recognize that entertainment is an inherently risky allocation that must be measured alongside overarching risk profiles and liquidity requirements. For HNW individuals, it is particularly important to weigh production finance against long-term financial and lifestyle objectives as a component of a balanced portfolio."

Nearly 30 per cent of survey participants believe hedge funds are an important source of capital today, and 45 per cent believe that hedge funds will be important sources in three years. More than 35 per cent of respondents suggested that private equity funds play a critical role today, with nearly 57 per cent reporting that these vehicles will be important sources of capital in 2013.

Roughly 20 per cent of those polled indicated that wealthy individuals are important sources of finance today, with nearly 40 percent expecting the HNW community to play a significant role in three years.