Daniel Mueller

The Australian media sector has wrecked the careers of many investors over the past decade. First were the growth investors; a decade ago high PE multiples were supposedly justified as deregulation was meant to lead to a wave of consolidation, which never occurred. Private equity emerged as the industry consolidators, using high levels of gearing to pay mind boggling prices for assets. Perhaps they didn’t foresee the structural changes that were about to hit the industry or how quickly change would come. Then value investors wandered into the briar bush. Once the dust settled, multiples came down to around 10 times, appearing attractive compared to the market. But it turned out to be a lot to pay for businesses rapidly going backwards. We’ve managed to avoid the sector and don’t think most valuations reflect the difficulties ahead. But we have made a recent foray into the media space; read about it in my latest blogpost: (VIEW LINK)


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