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Investing in Media & Entertainment

Guest article written for AllAboutAlpha.com – the official publication of the Chartered Alternative Investment Analyst (CAIA) Association Originally posted at: http://allaboutalpha.com/blog/2012/08/20/alpha-hunter-james-clayton-on-investing-in-media-and-entertainment/ “…Over the next five years, global spending on entertainment and media…

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When it came to Avatar… James Cameron's track record was just second to none- phenomenal. The creative vision he had to that film, tied to Fox's commitment in the movie and the advances in technology made it seem- at the time- quite an easy decision.

— James Clayton

The great thing about film is that the capital structures allow you to pick where you want to be on the risk-return spectrum. If you're looking for lower risk, you can sit where the banks used to- advancing money against known collateral.

— James Clayton

We're platform agnostic. People tend to see the market in terms of discrete sectors such as film, TV, music, video games, live and so on. We like to invest in content you can view many different ways- and that gives us depth and diversity within our portfolio.

— James Clayton

The first thing I'd say is to quote an old saying by William Goldman which is, 'in this business, nobody knows anything' – otherwise it would be sure fire and completely fail-safe!

— James Clayton

Our model is very much investing in media cash-flows. We don't take positions in quoted media stocks, as that introduces too much exposure to volatile equity markets- and media tends to get hammered more than other sectors when the markets have any degree of turbulence in them.

— James Clayton