Investment Considerations

Introducing the Music Tech Ownership Ouroboros, 2025 edition ✨ The music-tech sector has come of age. What started as a relatively niche investment thesis five years ago has matured into a powerhouse market segment, drawing tens of billions in capital since 2020. For five years, we at Water & Music have been mapping these shifting power dynamics through our “Music Tech Ownership Ouroboros” — a living document that traces the complex web of investments, ownership stakes, and strategic acquisitions shaping music and tech. Our latest update adds over 30 new relationships to the map, primarily from growth investments and M&A deals in 2024. The takeaway: Private equity firms and major labels are locked in a battle for control over independent music infrastructure. As indie market share keeps climbing, owning the tech backbone is becoming as valuable as owning the actual rights. Highlights from 2024 include: - Hellman & Friedman's majority stake in Global Music Rights — making GMR the third PRO owned by a private equity firm - Virgin Music Group's acquisitions of Downtown Music ($775M), [PIAS], and Outdustry - Flexpoint Ford's growth investments in Create Music Group ($165M) and Duetti ($34M) - KKR's acquisition of Superstruct Entertainment ($1.4B) and debt financing in HarbourView Equity Partners ($500M) - EQT Group and TCV's co-ownership of Believe (alongside CEO Denis Ladegaillerie), as part of taking Believe private - Vinyl Group's acquisitions of Serenade, Mediaweek Australia, Funkified Events, and Concrete Playground Link to the full interactive chart with sources is in the comments. Would love to hear what you think, and if any of these deals feel particularly standout or surprising to you! #musicbusiness #musicindustry #musictech #privateequity #musicinvestment #musicrights

Why is geology always behind production? It's a pattern I've seen repeatedly throughout my career, and it reveals something important about how we allocate capital. It's not geology’s fault. Geology is tough - Geology when constrained by production is much tougher.  The problem is structural, and it comes down to how mining companies think about capital allocation. When production is running smoothly, geology departments often get squeezed on budgets. After all, why spend money defining resources you won't need for years? The production teams are hitting their targets, the mill is running at capacity, and everything looks fine on the quarterly reports. So the geology budget gets trimmed, delayed, or reallocated to more "urgent" priorities. Inevitably, production catches up to geology. Suddenly, there aren't enough defined tonnes to maintain production rates. The company faces a choice: slow down production (unacceptable to shareholders) or mine lower-grade material that wasn't part of the original plan (damaging to profitability). Either way, it's a lose-lose situation. At this point, everyone looks at the geology department and asks, "Why aren't you ready?" But the reality is they weren't given the resources to stay ahead of production in the first place. Resource renewal is particularly critical for many operating mines, as the industry faces a looming resource shortage. In five years, many miners simply won't have enough tons in reserve to meet production requirements. It’s also not sufficient for geology to replace each tonne that is mined. Each tonne in the future mine plan will require multiple tonnes in the resource to reserve workflow. Not every tonne drilled will be economic. So what's the solution? The most forward-thinking mining executives understand that resource drilling = derisking future production and creating business optionality.  Level 4 thinking understands the importance of maximizing the efficiency with which inferred resources can become reserves. Resource development becomes a strategic investment and not just a cost centre. Changing our questions is a good start. Instead of asking, "How much do we need to spend on drilling?" the question should be, "How quickly do we need to derisk our resource, and what's the most efficient way to do that?". Our message to mining executives is this: if your geology department is consistently falling behind production, revisit your capital allocation strategy first. More drilling is not the answer. Investing in approaches that fundamentally improve the efficiency of resource conversion is. Objectivity can increase resource conversion efficiency +30-40% respecting QP/CP requirements.  Efficiency helps get ahead of production and secure long term reserves. Reach out, and let's have a conversation about improving your resource efficiency. It'll be different. Very different. Objectivity’s approach is zero risk. We don't engage unless we can clearly demonstrate value.

🎬 How Film Investors Get Their Money Back One of the biggest misconceptions in filmmaking is that film investment is a gamble with no clear route to return. The truth is, smart film finance is built on structure, strategy, and multiple revenue streams. Here’s a quick look at how investors typically make their money back 👇 💰 1. Recoupment Waterfall After the film is sold or licensed, income flows through a “waterfall.” Investors are repaid first often with a premium (10–20%) before profits are shared with producers, sales agents, and talent. 🎟️ 2. Distribution Deals Films generate revenue from various platforms: theatrical releases, streaming (Netflix, Amazon, Apple), TV networks, airlines, and digital sales. Each territory or platform contributes to the investor’s recoupment pool. 🌍 3. Tax Incentives & Rebates Depending on the location, production rebates or tax credits can return 20–40% of qualified spend, effectively reducing the investor’s exposure right from day one. 📀 4. Ancillary & Merchandising Revenue Soundtracks, merchandise, product placement, and remake or format rights can all add to the revenue stack. 🎥 5. Long-Term Library Value A good film doesn’t stop earning once it’s released library sales, streaming royalties, and international syndication can continue generating income for years. 💼 Rough Example Breakdown — £5 Million Film Investment Total Budget: £5,000,000 1. Government Rebates (UK + EU): Approx. 30% return → £1,500,000 back within 6–12 months. 2. Pre-Sales & Distribution Advances: Agreements secured pre-release (domestic + international) → £2,000,000 returned during or soon after production. 3. Post-Release Revenue (Streaming, TV, etc.): Within 2 years of release, additional returns from: SVOD & TV licensing: £1,000,000 Ancillary rights & merchandise: £250,000 Library/royalty income (years 3–5): £500,000 Total Revenue: £5,250,000 ✅ Investor Recoups 100% + 5% premium (£5.25M) ✅ Ongoing profit participation on future library sales Film investment isn’t a lottery ticket it’s an asset-backed opportunity when structured correctly. The key is transparency, experienced producers, and a realistic route to market. When creative vision meets financial discipline, both art and investment thrive. #FilmFinance #Investing #FilmProduction #EntertainmentBusiness #Producers #CreativeInvestment

The day after: with election uncertainty behind us, investors will focus on future clarity on policy priorities and implementation vs. what was proposed. 5 quick takeaways from me, David Kelly and Stephanie Aliaga: 1. A Republican controlled Congress increases the potential for significant policy changes, including tax cuts, deregulation and higher tariffs. The size of the Republican majority in both chambers will be key, as will Trump’s own priorities once in office. 2. U.S. equities remain supported, particularly on the back of robust growth and broadening earnings. However, risks around higher long-end yields and tariff implications don’t seem to be reflected in market prices and could generate volatility ahead. 3. At times, policy and market returns can take diverging directions. The performance of the Energy Sector and Clean Energy under the Trump and Biden administrations are a great example (see chart below). There's more to stock returns than politics and policy - macro context, global commodity prices, interest rates, risk appetite, and starting valuations matter more over a longer stretch of time. 4. Bond yields likely to remain volatile and elevated on the back of fiscal concerns, while trade uncertainties contribute to dollar strength and FX volatility. 5. Markets can thrive under various government configurations and diversification can help balance portfolios against unknown risks. #markets #economy #election

𝗠𝗶𝗻𝗶𝗻𝗴 𝗶𝘀 𝗵𝗼𝘁 𝗳𝗼𝗿 𝗮 𝗿𝗲𝗮𝘀𝗼𝗻 - 𝗶𝘁’𝘀 𝗯𝗲𝗶𝗻𝗴 𝗿𝗲𝗱𝗲𝗳𝗶𝗻𝗲𝗱. Mining has long sat in the background of capital markets. Often lumped in with the broader commodity markets and seen as slow, capital-intensive, and lacking technological progression. Important, but not investable. Strategic, but stagnant. Well, that narrative is breaking. Critical minerals, while always seen as national security assets, have ascended to a top national priority. Electrification, AI infrastructure, and defense supply chains are all colliding with a system that historically took 10+ years to deliver a new mine - if delivered at all. Meanwhile, discovery rates are collapsing while permitting timelines are stretching, further compounding capital risk. Due to this growing demand gap and market tailwinds, we spent the last few months mapping where the real bottlenecks and areas of venture-scale opportunity across the mining value chain sit, touching on: ⛏️ Exploration and feasibility - the binding constraints 🤖 Use of AI - sensing are collapsing the drill → data → decision loop ⏱️ Time-to-value matters - often more than technical novelty 💰 Moving multiples - how tech can move assets from “mining multiples” to “growth industrial” outcomes 📊 Business model innovation - why royalty-like, equity-linked models may matter as much as the tech itself The result is a framework for evaluating mining-tech opportunities via capital intensity vs. time-to-value, with a focus on cycle-time compression, risk reduction, and scalable value capture. And the best part? This isn’t just theory, we’re already seeing signals in OEM offtake behavior, upstream verticalization, and a new generation of founders treating mining as a potentially data-rich industry ripe for transformation. If you’re building, investing in, or navigating mining, minerals, or industrial AI — give it a read and let’s compare notes! As they say these days, the [VCs] yearn for the mines ⛏️ [Link to full piece in comments, also drop a comment if you want the spreadsheet backup to the market map] CC: Cathay Innovation, Simon Wu, Elijah Yi, Rose Yuan, Jaclyn H., Daniela Caserotto Leibert #Mining #CriticalMinerals #IndustrialTech #AI #EnergyTransition #VentureCapital #Reindustrialization

Relatively small amounts of critical minerals underpin trillions of dollars in economic value globally. New IEA analysis highlights growing risks, including export controls, although countries are also taking steps to make supply chains more secure 👉 https://iea.li/4aTpQ33 The geographic concentration of critical mineral supply chains continues to grow, particularly for refining. Rare earths are the exception. The top supplier's share fell from 90% in 2023 to 85% in 2025, showing progress is possible with strong policies. Read more in the International Energy Agency (IEA)’s Global Critical Minerals Outlook 2026 👉 https://iea.li/4bNpwDh While critical mineral projects are being announced & developed across the globe, we see a structural imbalance in diversification efforts. Investment outside the dominant supplier remains concentrated in mining, while efforts to expand refining & downstream capacity lag behind. In a complex geopolitical environment, critical minerals have moved to the forefront of countries’ energy, economic & national security agendas. This is making a difference: public finance commitments more than quadrupled between 2023 and 2025, reaching $65 billion. New IEA analysis also sees a major opportunity to diversify supplies of strategic minor minerals. The investment needed is much smaller than the potential risks of disruption and can be seen as economic insurance. Since #CriticalMinerals account for a small share of final product prices, the cost of diversification could have a limited impact on consumers. For example, critical minerals account for around a quarter of battery cell costs but only about 3% of the price of an average EV. Diversified supply is not only a matter of investment: it also means tackling gaps in technology, equipment & workforce skills. Our new Global Critical Minerals Outlook 2026 includes guidance for policymakers on this & more. Read it in full on our site 👉 https://iea.li/4bNpwDh

You know investors now definitely see sports as an asset class when J.P. Morgan, Goldman Sachs, and Morgan Stanley all decide to allocate time and resources to launching sports-focused teams / reports / indexes. 📈 ➡️ J.P. Morgan   6 months ago, J.P. Morgan launched a new "sports investment banking coverage group" to cover investments in sports franchises for their clients around the globe.   Fred Turpin, J.P. Morgan’s Global Head of Media and Communications Investment Banking declared then: “With top sports franchises in the US and Europe now valued at more than $400 billion in total, sports have become an increasingly large asset class, attracting more and more institutional investors.”   ➡️ Goldman Sachs   Last month, GS released a report called "Changing the Game: Unlocking new opportunities in sports" in which they picture sports as an "outperforming asset class generating opportunities for corporates and investors to diversify their assets and unlock value."   Here's a quote from Dave Dase, Global Co-Head of Sports Franchise:   "The days of just selling tickets and concessions are over; sports are rapidly expanding into 24/7 data management platforms that bring best-in-class customization - helping teams grow and increase the monetization of their fan base across all business verticals.”   Trends quoted in the report include:   📱 Evolving media landscape shaping a new era for sports rights   🤝 Minority stakeholders becoming an essential part of the capital structure in parallel with soaring sports teams’ valuations 🎮 Expanding range of sports-adjacent businesses 🥅 Modern-day stadiums generating new avenues for monetization   ➡️ Morgan Stanley And now, Morgan Stanley’s wealth management division is launching an investment index tied to sports leagues.   Name of the index?   The "Parametric Custom Core Sports League" strategy.   The portfolio's holdings will consist of 250 to 400 securities from companies that have sponsorship, media, advertising deals, and other associations with major sports leagues, including the NBA, WNBA, NFL, NWSL, MLS, MLB, LPGA, PGA, NHL, US Open Tennis, F1, Nascar, and college basketball.   The portfolio is aimed at high net worth sports fans with a $250k investment minimum.   It will allow them to invest in a curated index of companies with strong sponsorship, media and advertisement ties to the most prominent sports leagues.   Sandra Richards, Managing Director and Head of Morgan Stanley’s Global Sports and Entertainment Division, stated:   “We see the demand from our clients that are asking about ways to invest in sports. And it’s going to continue.”   To be noted that they'll use Nielsen Sports as its data source to track the activity, spending and visibility of the companies with exposure to professional sports leagues.

Moody's Ratings has made a significant announcement (to me at least): Water is no longer just an ESG concern; it is now recognized as a credit risk. In their recent analysis, water is identified as: • A credit differentiator • Embedded in sovereign and infrastructure risk • Modeled as a systemic dependency (e.g., desalination in the Middle East) Approximately one-third of rated sovereigns are already experiencing elevated water stress. For investors and private equity, this shift changes the landscape: Water risk now directly affects: • Asset valuations • Cash flow stability • Insurance availability • Exit multiples The transition is clear: Yesterday → Water was merely a disclosure topic Today → Water is being factored into risk assessments What does this mean? We are moving towards a repricing of: • Energy and utilities • Industrials • Infrastructure portfolios Additionally, there will be an increasing premium on: • Water resilience capital expenditures • Basin-level risk understanding • Scalable water technologies If water is not yet included in your investment committee memo, it will soon be a critical factor in your downside case. On the positive side, its good news for new water technologies that are able to mitigate those risks compared to the usual suspects 😉 For further insights, consider these sources: https://lnkd.in/eWhx-_wJ https://lnkd.in/emEpxztA https://lnkd.in/ex8xwv8X

📢 Good news from Brussels today: the EU Commission unveiled two initiatives to advance the Savings and Investments Union and deliver tangible benefits for EU citizens. According to the EU, around €10 trillion is currently held in ordinary bank accounts across Europe. The EU aims to create incentives for citizens to invest their savings in the capital markets. Additionally, small and medium-sized enterprises are to be given easier access to capital at the European level. At the same time, only 1 in 5 EU citizens currently has a high level of financial literacy (Eurobarometer 2023). The new strategy tackles this with EU-wide campaigns, support for national initiatives, funding for financial literacy research, and regular monitoring. The package focuses on:
1️⃣ A new Financial Literacy Strategy which equips citizens with the knowledge and skills to make sound financial decisions, budget better, avoid scams, save more effectively, and invest for their future.
2️⃣ A blueprint for Savings and Investment Accounts. These are simple, accessible accounts designed to make investing easier for everyone, while supporting Europe’s growth and competitiveness. Together, these initiatives aim to empower citizens to build financial independence, foster a stronger investment culture, and channel savings into Europe’s economy to drive innovation, jobs, and growth. 👉 What do you think? Could SIAs and stronger financial literacy be a game-changer for Europe’s savings and investment culture?

Water the investment risk? Our new Danske Bank white paper is finally OUT!! Our analysis shows that 39 Nordic companies dependent on water in their operations generate DKK 1,700 billion in revenues while operating in high or extreme water-stressed areas. That equals around 13% of Nordic GDP – and that’s a conservative estimate, as value chains are not included. So what’s the issue? 💧Many of these water-dependent companies are not disclosing whether they measure, mitigate, or prepare for water risk. 💧This leaves them exposed to production disruptions, higher costs, license-to-operate challenges – and ultimately investor pressure. 💧and it won't stop here: scenario modelling shows that company exposure to water stress will only increase in the future. This is not a future dystopia: 🚗 Tesla’s Berlin gigafactory faced costly delays due to groundwater protests. 🍺 Constellation Brands wrote down $660 million abandoning a brewery in Mexico. 🌊 Antofagasta had to invest $1.5 billion to secure seawater access in Chile. The risks are systemic. Today, more than 4 billion people live under water-stressed conditions for at least one month of the year. The WEF Global Risk Report 2025 lists water shortages as a top-five risk in 27 countries. The Stockholm Resilience Centre confirms the planetary boundary for freshwater has already been crossed. By 2050, 31% of global GDP is projected to be exposed to high water stress. In our research, we combined company revenue data, asset locations, materiality data, and water stress maps – structured via the TNFD-aligned LEAP framework – this can enable investors to: ✔ Identify water-exposed holdings ✔ Inform engagement strategies ✔ Integrate water risk into portfolio construction We also include a deep dive on beverage companies - a sector that is for obvious reason very dependent on water - and compare Nordic players to their global peers. The results highlight the different approaches taken by global beverage companies. Nordic companies are not yet waterproof. But with the right tools, data, and investor engagement, they can be. This paper offers a concrete starting point for that journey. Find the paper here: https://lnkd.in/dekSVkFJ #Danskebank #responsibleinvestments #waterstress #dkfinans Peter Lindström, CFA, Allan Emanuelsson