From recording royalties to renewable energy infrastructure. Why we’re keen to complement our equity and fixed income positions with alternative sources of potential returns.
Music elicits an emotional response; we choose tracks based on our mood, or use it to generate a sense of calming, happiness or to motivate. In that vein, we’re upset the Swedish quartet have ruled out an in-person appearance at the Stockholm-held Eurovision 2024 Song Contest.
Video killed the radio star
Led by the popularity of Spotify, the royalty payment industry changed beyond recognition with all your favourite artists in one place for a reasonably low monthly fee. Artists and songwriters once again had a mechanical way to receive at least some level of compensation for their content. In addition, owners of music continued to earn significant additional income when their music is used in commercials or tv shows.
New music one-hit-wonders can come and go, but some of it stands the test of time. More Freddie Mercury, less Right Said Fred.
Now that’s what I call an alternative!
% Growth, TR, GBP, Since Launch To 31/01/2023
Switching genres
Renewable energy generation is the only way UK government will not need to renege on its net zero commitment. The Renewables Infrastructure Group owns a strategic portfolio of energy generating assets in the UK and Europe, underpinned by government inflation-linked subsidies. Despite the trust’s revenue growth, due to the dislocation in the investment company sector over the past 18 months, we’ve been able to access the trust at a level close to its IPO price, which was some ten years ago now.
We recently initiated a position in Tritax Big Box REIT, one of the largest owners of logistics property ‘sheds’ in the United Kingdom. E-Commerce boomed during COVID lockdowns, as did the valuation of the trust, but we found a much more attractive entry point to access some of the highest quality e-commerce property around, underpinned by continued strong rental growth. A recent visit to its Littlebrook Amazon site revealed just how high-tech ‘sheds’ can be.
With a combination of interest rate pressures, an issuance overhang, changing regulatory regime or just UK equities being hideously out of favour, we may have to be patient to see investment company share prices recover. Non-executive boards now need to roll their sleeves up to unlock value for shareholders; credit to Robert Naylor, Chairman of Round Hill Music Royalties, for doing so.
