A unique asset that’s materially undervalued

Digital disruption has been, and will continue to be one of the major themes of the 21st century. Across a raft of industries, traditional business models are being superseded by digital platforms such as Facebook and Amazon. Music streaming is a new front in which behemoths such Apple and Google are battling for dominance with established players such as Spotify and Pandora. In such a competitive environment, the value of publishing rights attached to popular back catalogues is expected to increase. We recently added Vivendi SA, the French media conglomerate, to our portfolios. Through its ownership of Universal Music Group, Vivendi owns the rights to almost one-third of all existing music catalogues and is a dominant player in the production of new works. In our view, this unique asset is being materially undervalued by the market. (Justin Braitling, Chief Investment Officer)