The Metaverse Gold Rush

Insights on the metaverse and modelling a stock-picking philosophy on the California gold rush, from TEAM Jersey Chairman and Fund Manager Mark Clubb.

The word “metaverse” has started to appear in our language. So much so, that Mark Zuckerberg has changed the name of his company from Facebook to Meta.

The TEAM International Equity Fund currently owns no Meta (formerly Facebook) shares. But fear not, we have plenty of exposure.

Prior to the name change, Facebook and Zuckerberg had already made significant investments in virtual reality, including the 2014 acquisition of Oculus. Meta (Facebook) envisions a virtual world where digital avatars connect through work, travel or entertainment using VR headsets. Zuckerberg has been bullish on the metaverse, believing it could replace the internet as we know it. “The next platform and medium will be even more immersive, an embodied internet where you’re in the experience, not just looking at it. And we call this the metaverse,” said Zuckerberg last month after revealing the company’s rebranding. 

What is the “metaverse”?

The metaverse is a hypothesised iteration of the internet supporting persistent online 3D virtual environments through conventional personal computing, as well as virtual and augmented reality headsets. Current metaverse ambitions are centred on addressing technological limitations with modern virtual and augmented reality devices, as well as expanding the use of metaverse spaces to business, education, and retail applications. Numerous entertainment and social media companies have invested in metaverse-related research and development.

(Source: Wikipedia)

At TEAM, our International Equity Fund investments with exposure to the metaverse are:

  • Amazon: the globally dominant online shopping platform that will seek to establish some version of an “Amazon mall” in the metaverse in which shoppers can interact and buy digital products. Innovations such as virtual try-on, virtual pop-up stores and a virtual avatar economy will likely change the retail landscape. Amazon Web Services (AWS) plays a major role in building and maintaining metaverse infrastructure.
  • Apple: with its dominant iPhone, App Store, Apple Watch and realistic graphics and unparalleled user interfaces, Apple will continue to be a dominant player in the metaverse space.
  • Microsoft: Microsoft sees the metaverse as completely revolutionising the way professionals meet, collaborate, and interact online using avatars or even hologram. Microsoft’s HoloLens, which are mixed reality smart glasses, and Xbox gaming consoles, play important roles in the Metaverse user interface. Microsoft owns Minecraft. Microsoft’s Azure cloud plays a major role in building and maintaining metaverse infrastructure.
  • Google: the metaverse will have more data and perhaps greater returns on it than today’s web, a space where Google has been a pioneer in developing new and sustainable monetisation opportunities. Google is the market leader in indexing both the digital and physical world, and operates the most-used operating system on earth (Android). Google offerings such as Google Glass, Google Assistant (digitising our home), its Nest suite of products, FitBit, Google Street View, edge computing on Stadia, and Project Fi all play important roles in metaverse. Google Cloud Platform (GCP) plays a major role in building and maintaining metaverse infrastructure.
  • Nvidia: Nvidia produces the graphics and video processing chips used in high-end computing servers, supercomputers, artificial intelligence and virtual reality applications. Nvidia chips will play a crucial role in supplying the massive amount of processing power the metaverse will require. Nvidia is also creating its own metaverse platform, called Nvidia Omniverse. Nvidia Omniverse is a platform used for connecting 3D worlds into an integrated virtual universe, which can be used for a wide range of enterprise applications, such as design collaboration, simulation of real-world architecture or as a useful tool for training robots.
  • Qualcomm makes chips for mobile devices, including smart glasses. Qualcomm recently reported fantastic 43% year-on-year increase in revenue to $9.26 billion for the fourth quarter. Wall Street analysts’ consensus regestimates were $8.86 billion. From those revenues’ profits came in at $2.9 billion. Qualcomm is also one of the pre-eminent beneficiaries from the forthcoming explosion in the roll out of 5G. 5G is key to the metaverse infrastructure build-out.
  • Shopify: Shopify enables small business owners to launch websites, conduct business online and aspires to empower business owners to continue this foray into metaverse commerce. Shopify acquired AR app Primer, which allows its users to see firsthand the effects of a purchase or project in their space. For the metaverse, it gives Shopify a powerful tool that subscribers can use to build-out potential stores or shopping experiences in the digital world. In addition, Shopify launched a new NFT platform that will allow digital creators to sell art and other content directly to consumers. The Chicago Bulls were the first to test the offering, launching limited NFTs of the basketball team’s 1991 championship rings. The two efforts set up Shopify quite nicely to plug into the metaverse and give it a foothold into the potential commerce aspirations of this virtual world.
  • Disney: nn Sep 30, 2021, Disney unveiled two new technological achievements designed to carry its theme park and resort guests’ imaginations into the future, the MagicBand+ wearable and the “Hey Disney!” voice assistant. These innovations continue to build upon the Disney “theme park metaverse,” where technology is part of the magic, seamlessly integrating the physical, digital and virtual worlds to help guests navigate Disney properties and platforms. Here, guests immerse themselves in Disney stories, connect with characters they love and share unforgettable experiences with the world, creating new magic in ways only dreamed of before. Marvel Entertainment, a wholly-owned subsidiary of The Walt Disney Company, is mainly known for its comic books by Marvel Comics. Some of the comic book characters owned by the company are Spider-Man, Iron Man, Captain America and Wolverine. In June 2021, Marvel Entertainment partnered with VeVe platform to offer NFT collectibles.

One of the common strands of DNA permeating TEAM’s stock-picking philosophy is the concept of buying ‘shops that sell the picks and shovels’, a strategy named after the California Gold Rush of the 1840s and 1850s. Prospectors needed to buy a pick and a shovel to be able to mine for gold. While there was no guarantee that a prospector would find gold, the companies that sold picks and shovels were earning revenue and thus were good investments.

Rather than attempt to look around corners, our preference is to focus our energies on bottom-up selection. In this regard, the fund owns a stable of strong, globally established businesses across different touch points and technologies that that are all positioned to capitalise on the trends unfolding from the move to the metaverse.

Mark Clubb

Chairman and Fund Manager

TEAM Jersey


Disclaimer This document is issued by Theta Enhanced Asset Management Limited and does not constitute or form part of any offer or invitation to buy or sell shares. It should be read in conjunction with the Fund’s Prospectus, key investor information document (“KIID”) or offering memorandum. Theta Enhanced Asset Management Limited is authorised and regulated by the Jersey Financial Services Commission, registration number 80836. The Company’s registered office is 10 Hill Street, St Helier, Jersey JE2 4UA. The price of shares and income from them can go down as well as up and past performance is not a guide to future performance. Investors may not get back the full amount originally invested. A comprehensive list of risk factors is detailed in the Prospectus and KIID and an investment should not be contemplated until the risks are fully considered. The Prospectus and KIID can be viewed at www.team.je and at www.geminicapital.ie The contents of this document are based upon sources of information believed to be reliable. Theta Enhanced Asset Management Limited has taken reasonable care to ensure the information stated is accurate. However, Theta Enhanced Asset Management Limited make no representation, guarantee or warranty that it is wholly accurate and complete. The TEAM International Equity Fund is a sub- fund of GemCap Investment Funds (Ireland) plc, an umbrella type open-ended investment company with variable capital, incorporated on 1 June 2010 with limited liability under the laws of Ireland with segregated liability between sub-funds. GemCap Investment Funds (Ireland) plc is authorised in Ireland by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (S.I. No. 352 of 2011) (the “UCITS Regulations”), as amended. Gemini Capital Management (Ireland) Limited, trading as GemCap, is a limited liability company registered under the registered number 579677 under Irish law pursuant to the Companies Act 2014 which is regulated by the Central Bank of Ireland. Its principal office is at 118 Rock Road, Booterstown, Co Dublin A94 V0Y7 and its registered office is at 1 WML, Windmill Lane, Dublin 2, D02 F206. GemCap acts as both management company and global distributor to GemCap Investment Funds (Ireland) plc. GemCap UK Limited Ltd provides distribution oversight services to GemCap acting as global distributor and is responsible for the oversight of all distribution arrangements for the sub-fund.

In other news...

IMPORTANT INFORMATION

You must submit your agreement before access to the site can be granted

SCROLL TO READ

This website is directed at institutional clients and individuals who have taken appropriate professional advice, who possess the necessary experience, knowledge and expertise to make their investment decisions and properly assess the risk that it incurs.

Gemini Capital Management (Ireland) Limited, trading as GemCap, is a limited liability company registered under the registered number 579677 under Irish law pursuant to the Companies Act 2014 which is regulated by the Central Bank of Ireland, reference number C155302. Its principal office is at Ground Floor, 118 Rock Rd, Booterstown, Co. Dublin, A94 V0Y7 and its registered office is at 1 WML, Windmill Lane, Dublin 2, D02 F206.

GemCap acts as management company and global distributor to GemCap Investment Funds (Ireland) plc.

GemCap Investment Funds (Ireland) plc is an umbrella fund with segregated liability between sub-funds incorporated as an investment company with variable capital registered under the registered number 485081 under Irish law pursuant to the Companies Act 2014 and authorised by the Central Bank of Ireland, reference number C67292, pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (as amended) ), having its registered office at 1 WML, Windmill Lane, Dublin 2, D02 F206(“the Fund”) .

The contents of this site have been prepared solely for information purposes and is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. GemCap and the Fund does not give or make any guarantee, representation, warranty or other promise or confirmation (whether express or implied) as to its accuracy or completeness.

 

Risk Warnings

Please remember that the value of investments and the income from them can fluctuate (this may partly be the result of exchange rate fluctuations) and you may not get back the full amount invested. Past performance may not a reliable guide to future performance. A comprehensive list of risk factors is detailed in the Prospectus and the key investor information document (“KIID”) and an investment should not be contemplated until the risks are fully considered. The Prospectus and KIID can be viewed at www.geminicapital.ie

GemCap does not provide financial, investment, tax or any other professional advice in any way and none of the information on this site should be construed as such. None of the information contained on this site constitutes an offer to buy or sell or a solicitation, recommendation, invitation by or on behalf of GemCap to buy or sell any security, product, service or investment. Any opinions expressed on this site do not constitute investment advice and independent advice should be sought where appropriate. The view and/or opinions expressed by GemCap through this or any other platform, may be subject to change.

The shares in the Fund have not been and will not be registered under the US Securities Act of 1933 (the “1933 Act”) as amended or the securities laws of any of the states of the United States. The Shares may not be offered, sold, transferred, pledged or delivered, directly or indirectly, in or into the United States or to or for the account or benefit of any US Person except pursuant to an exemption from, or in a transaction not subject to the registration requirements of the 1933 Act and any applicable state laws, nor in any jurisdiction in which the Fund is not authorised to be publicly sold. The Fund is available only in jurisdictions where their promotion and sale are permitted.

The information contained on the website may not be redistributed directly or indirectly to any citizen or resident of the United States or any other jurisdiction where its distribution may be restricted by law. It is the responsibility of persons accessing the website to ensure compliance with the above.

Disclaimer for Investors in Switzerland

The Fund and its sub-funds, Calamos Global Convertible Fund and Third Avenue Real Estate Value Fund has been approved by the Swiss Financial Market Supervisory Authority FINMA (“FINMA”) for offering to Swiss non-qualified investors.

This website may contain advertising.

In Switzerland, the representative is ACOLIN Fund Services AG, Leutschenbachstrasse 50, CH-8050 Zurich, whilst the paying agent is Banque Cantonale Vaudoise, Place St.-François 14, CH-1003 Lausanne.

Swiss investors may obtain free of charge from the representative in Switzerland, the relevant fund documents, namely the prospectus, the key investor information documents, the articles of association, as well as the annual and semi-annual reports.

 

Past performance results are no indication of future results. Issuance and redemption commissions are not included in the performance figures. Performance results referring to a period of less than twelve months (year-to-date-performance, start of investment fund within the last twelve months) are no reliable indicator for future results due to the short comparison period.

 

Additional information for Qualified Investors in Switzerland:

The below-mentioned investment funds, which are also disclosed on this website, are neither registered with FINMA nor under contract for representation to Swiss investors. These investment funds may not be distributed neither to Swiss non-qualified and qualified investors nor exclusively to Swiss qualified investors:

 

GemCap Investment Funds (Ireland) Plc

Atlantic House Defined Returns Fund

Atlantic House Global Defined Returns Fund

Atlantic House Total Return Fund

Atlantic House US Enhanced Equity Fund

Causeway Defined Growth Fund

GSI Global Sustainable Value Fund

GSI Global Sustainable Focused Value Fund

London & Capital Global Balanced Fixed Income Fund

London & Capital Global Conservative Fixed Income Fund

London & Capital Global Defensive Equity Fund (this Fund has terminated and accordingly, Shares in this Fund are no longer available for investment)

London & Capital Global Growth Fund

London & Capital Global Growth Fixed Income Fund

London & Capital Global Star Equity Fund

London & Capital Global Balanced Fund

Principal Asset Allocation Fund

Semper Total Return Fund

TEAM International Equity Fund

 

 

Legal

This GemCap website and material contained herein (including information from third parties) is provided ‘as is’, without any representation or endorsement made and without warranty of any kind whether express or implied, including, but not limited to, the implied warranties of satisfactory quality, fitness for a particular purpose, non-infringement, compatibility, security, completeness and accuracy.

By entering this site, you acknowledge and agree that the use of this site is at your own risk and to the extent permissible by applicable law, in no circumstances, including (but not limited to) negligence, shall GemCap be liable for any direct, indirect, incidental, special, consequential, or punitive damages, losses, costs or expenses nor for any loss of profit that results from the use of, or inability to use this site or any material on any site linked to this site (including but not limited to any viruses or any other errors or defects or failures in computer transmissions or network communications) even if we have been advised of the possibility of such damage. In addition, no liability can be accepted by GemCap in respect of any changes made to the content of this site by unauthorised third parties. All express or implied warranties or representations are excluded to the fullest extent permissible by law. We do not warrant that this site does not infringe any intellectual property rights of third parties.

No data transmission over the internet can be guaranteed as totally secure. Whilst GemCap strives to protect such information and every effort has been made to implement security protocols, in line with relevant legislation to ensure safe processing and storage of any data transmitted, we do not guarantee and cannot ensure the security of any information which you transmit to us. Accordingly, any information which you transmit to us is transmitted at your own risk.

The GemCap website is not a substitute for independent professional advice and users should obtain any appropriate professional advice relevant to their particular circumstances.

The information on this site is issued by GemCap.

 

Cookies

If you use the internet quite a bit, there’s a good chance you’ve heard of cookies.

But what are they?

Also known as HTML cookies, tracking cookies or magic cookies, these tiny files are automatically downloaded by your computer when you’re browsing online. Don’t worry – they’re perfectly safe. But we’d still like to take a moment to explain what cookies do, which ones we use and how to remove them – if you really want to.

Are Cookies Safe?

Yes, cookies are safe. The information they collect is completely anonymous. We never, ever, collect personal information using cookies. What’s more, cookies are not harmful to your computer, they take up minimal space and they can be removed with just a few clicks.

GemCap’s Cookie Functionality

  • Cookies provide enhanced functionality and speed to our site
  • These cookies help us to recognise your computer when you visit Gemini-Capital.ie and enable us to improve your visits to our website
  • Cookies assist us in identifying what kind of visitor/user you are, for us to provide you with the most relevant content
  •  

How Can I Remove Cookies?

Most computers are set to download cookies automatically, so if you’re happy with everything you’ve read, simply carry on as you were. However, if you’re at all concerned about having cookies on your computer, deleting them is simple.

Show me how to remove cookies

Likewise, you can also change your computer settings so that it won’t download any more cookies.

Show me how to change my cookie settings

The information on this site is issued by Gemini Capital Management (Ireland) Ltd, which is registered in Ireland No. 579677. The registered address for the company is 1 WML, Windmill Lane, Dublin 2, D02 F206, Ireland.