“Obliquity is characteristic of systems that are complex, imperfectly understood, and
change their nature as we engage with them. Oblique approaches are most effective in
difficult terrain or where outcomes depend on interactions with other people.”
John Kay, Obliquity – Why our goals are best achieved indirectly, 2010
What is Vincent Bolloré up to with Vivendi?
This must be the most frequently asked question we have had from investors in the
past three years. Having taken a fresh look at Vivendi’s recent moves and stated
ambitions, and reviewed Vincent Bolloré’s investment strategy over the past 30 years,
we believe we have a clearer picture.
We think his objective is to build a leading media and content player with the scale to
leverage the rising demand for content and entertainment worldwide. In particular, we
think that with Vivendi, Mr Bolloré, being a pragmatist, will seek to exploit opportunities
created by the uneven penetration of music, video and game services around the
world, in particular in France, Southern Europe, Africa and, to a lesser extent, emerging
markets.
Obliquity is likely the best approach, although harder to follow for outsiders
The new Vivendi is different, both in terms of what it wants to become and in terms of
how it wants to become it. The Bolloré group has shown that the biggest opportunities
require upfront investment, patience and persistence (Africa, batteries, Havas) that are
initially difficult to capture in a DCF model or P/E multiples.
Investing in Vivendi today requires accepting Vincent Bolloré’s philosophy on complex
and long-term investments in new or changing industries: “We can invest for 30 to 40
years. Long term projects and investments can only be made in controlled grouped like
ours. We do nothing by chance. Projects are slowly matured. One investment leads to
another one, everything is connected in what we do” 1.
Vivendi offers upside from one growth and one recovery story – and maybe more
Connect the dots of Vivendi’s various moves in the past two years and a coherent,
albeit complex, pattern emerges. In short, Vivendi offers exposure to two exciting
growth stories: music streaming and African pay-TV/content, and exposure to one of
the largest restructuring stories in European media: Canal France.