Irenic Capital Management LP, a Manhattan-based hedge fund, has taken an 8.1% stake in Reservoir Media and believes the music company is “undervalued,” according to a regulatory filing dated Monday (Sept. 30). 

Described as an “activist investor” by The Wall Street Journal, Irenic called on Reservoir to “undertake a full strategic review of all alternatives to maximize shareholder value and to form a special committee to the Board to oversee such a process.” 

“The Reservoir Media board of directors values shareholder input and we remain focused on executing our strategy to drive value, in line with our fiduciary duty to all shareholders,” a company spokesperson said in a statement to Billboard. 

Reservoir’s stock has outperformed many of its peers in the multi-sector, record label/music publisher sector in 2024. Through Wednesday, Reservoir’s 7.7% year-to-date gain has bested Universal Music Group (down 8.3%), Warner Music Group (down 12.5%) and the four K-pop companies: HYBE, SM Entertainment, JYP Entertainment and YG Entertainment (down an average of 33.1%). 

Only French music company Believe, which has gained 42.5% because it was the target of a management-led takeover, has done better than Reservoir. In explaining the move to take it private, Believe CEO Denis Ladegaillerie said the company had “outperformed its objectives” but its success “has not been reflected in the share price evolution.”

Still, Reservoir is well below its original $10.00 price when it merged with Roth CH Acquisition II Co, a special purpose acquisition company (SPAC), in 2021. Wednesday’s $7.68 closing price is well below its 52-week high of $9.20.  

Irenic owns stakes in trucking company Forward Air, Canadian software company Kinaxis and industrial technology company Barnes Group Inc., where Irenic CEO Andy Katz gained a board seat in March. On its website, Irenic explains that it “invests in public companies and works collaboratively” with management for improvements in operating and financial performance “that create long-term value for the company and its owners.” Katz previously worked at Elliot Management and focused on “special situations” such as public equity activism and distressed credit.