Hedge fund manager Bill Ackman’s plan to acquire 10% of Universal Music Group through his SPAC, at a valuation of $43 billion, is the clearest sign yet that the music industry is, improbably enough, hot. Yes, the industry that was in decline for years thanks to piracy and the digital disruption of the CD business is showing enough promise from streaming that it is attracting big name investors.
And Ackman isn’t the real investment powerhouse here. That would be Tencent, the Chinese tech giant that will emerge—when all is said and done—as the second biggest shareholder in a newly public and independent Universal Music, owning 20% of the stock. Tencent, as we noted in this deep dive, is the definition of smart money. So what is it that Tencent and Ackman see in the music business?
