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Music royalties, healthcare and luxury aircraft – growth opportunities for the investment management sector

by Sellick Partnership | 4 October 2019

Sellick Partnership sat down with Fund Managers Gary Moglione and Richard Parfect of Seneca Investment Managers to find out why they think alternative investments will support the sector’s future growth.

In recent years the investment management sector has been looking for ways to diversify in order to protect themselves and their clients against a downturn in interest rates, equity markets or fixed income markets, and alternative investments have started to take centre stage. Investment funds that include GP surgeries, Emirates A380 luxury aircraft and music royalties are now becoming the norm across the investment landscape and are giving the sector a huge boost.

Seneca Investment Managers have been investing in the alternative space for over a decade and believe it is growing due to their investors’ search for investment vehicles that are less volatile and will provide a greater overall yield. The growth in investment funds such as this is giving fund managers a much greater opportunity to find unique and interesting investments that are more relatable and that investors can associate with.

One such fund that Seneca has recently got involved in is the Hipgnosis Songs Fund – a fund that buys the rights to music and offers investors a chance to profit from the royalties paid when radio stations, films, adverts or streaming sites use the songs. You might think that this is a very unusual choice considering the music industry has been in decline for years due to the effects of piracy. However, the rapid rise of streaming has resulted in a turning point and global revenues for the music industry have been rising in recent years. As a result, Gary, Richard and the Seneca team spotted a huge opportunity in this area.

As a music fan I found this incredibly interesting, and I can see why investment funds like this could be having a positive impact on the sector overall. With more investment opportunities comes a greater need for experienced managers, which can only be a good thing for the future of the investment sector across the UK.

What is even more fascinating is the fact that not anyone can access these new, innovative investments. A retail investor – or a non-professional investor – for certain specialist types of investments, for regulatory purposes, must go through an investment house such as Seneca to access investments like this, again giving the sector more opportunities for growth.

It is also exciting to think about what other investment opportunities may arise as fund managers continue to explore this space. Seneca has tested numerous investment opportunities and are always happy to move forward with an opportunity if it is financially viable and the risk/reward ratio is in their client’s favour. This is allowing professionals within the sector to think outside the box and is also opening up opportunities to specialists that may not have seen any opportunities for working as a fund manager previously.

For example, when looking for managers to head up funds, Seneca search for credible experts within that field. That is why the Hipgnosis Songs Fund has worked so well. It is headed up by a panel of industry experts, making the investment a safer and more credible vehicle to manage. If investment managers continue to diversify in this way I feel we could see opportunities rise in numerous sectors, giving experts in those sectors a new and highly rewarding career opportunity.

Looking further into the future I am excited by what alternative investments such as the Hipgnosis Songs Fund could do for talent and recruitment within investment management. Not only could we see the sector grow exponentially, but the need for highly skilled fund managers in cities such as Manchester and Liverpool could rocket giving investment houses across the North West a real opportunity to put themselves on the map, and attract talent from huge investment hubs such as London and Edinburgh.

What next?

If you are interested about hearing more about Seneca’s investment portfolio, feel free to contact them directly. Or, if you are interested in a career within investment management, get in touch with myself for a confidential chat by calling 0151 224 1480.