Is your portfolio in need of a little action? Then you could end up getting lucky. The world's first adult entertainment industry investments firm wants to give investors more...ahem...bang for their buck.
The firm, AdultVest, was started by Francis Koenig, a former hedge fund manager who says the $60 billion adult entertainment industry is wide open for investment. But will Wall Street buy it?
"There are other big markets out there I could've taken on, but there's no competition here," Koenig says. "So there are no other financial institutions doing what we do. We're the first."
Koenig's plan Moves business from the bedroom to the boardroom, pairing profitable mid-sized companies with accredited investors through two funds, the Bacchus fund with a minimum $1 million investment, and the Priapus fund with a $100,000 minimum investment.
Also in the pipeline are mergers, acquisitions and capital introduction, with the goal of taking majority stakes -- in some cases, even taking companies public. Historically, that's been a challenge given the reluctance of underwriters and service providers. But experts say Koenig has tapped into the growth of reverse mergers.
"The adult entertainment biz has had difficulty raising capital through traditional venture capital, private equity," said David Ficksman, a corporate finance and security expert. "What he's identified is the opportunity to raise capital in the public marketplace."
Koenig says hundreds of companies and thousands of investors have registered with the two-year-old firm. Already, there's a deal in the works with the publisher of adult video star Jenna Jameson's upcoming erotic audio book. And there's a partnership with Michael J. Peter of MJ Peter & Associates, who is credited with creating the gentleman's club concept.
"We're taking our street smarts, packaging it with this extraordinary Wall Street team," Peter said. "For the first time there's institutional funds available to grow these businesses and to do them bigger and better."
And Koenig says investors will follow the money.
"Many of them will never enter the industry, but a lot of them that have never been in this territory will start to open their eyes," Koenig said. "And even the most conservative investors will realize that this is a good investment."