Investing in digital media funds

Investing in digital media funds

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The digital revolution has created a thriving industry that is rapidly positioning itself as one of the UK's dominant industries. Over recent years we have witnessed the death on manufacturing in the UK (rapidly taken over by China) and in more recent years the service industry has outsourced many jobs to the likes of India. Increasingly specialist niche industries such as those related to the digital media industry are becoming major drivers of the UKs thriving economy.

In response to this growing industry many funds are being set up to try and exploit the opportunities available. One great example is the TV giant Endemol UK (most famous for bringing Big Brother on to our television screens) which set up its own digital media fund in the middle of 2006, pumping in more than £15m. The aim of the fund is to seek out a strong portfolio of assets to compliment and help its existing business.

Initially these media funds tended to be set up by existing players in the industry to try to consolodate their market position and seek future growth or revenue streams. In addition as with any area of oppotunity it wasn't long before there were a few hedge funds sniffing round and setting up funds to try and make a quick buck.

As the market is now maturing slightly there are now more traditional funds emerging who's focus is solely on the digital media industry. Many banks and investment houses are not introducing media specific funds. Daniel Breen and anlaysts for a US based investment house says "Currently, we are seeing an opportunity for investment in the area of emerging technologies, as we see falling regulatory barriers worldwide and changing consumer attitudes. The business trends and the fundamentals suggest major growth potential ahead."

Currently investing in these funds may not be accessible to the average small investor due to minimum investment amounts however as competition increases and the market develops they should become more accessable, indeed some media focussed Exchange Traded Funds (ETFs) are now appearing on the market.