But in a new presentation sent to Vivendi, which will be made available to the company's investors, P Schoenfeld Asset Management said UMG's long-term profits and growth would be "obscured" as long as the business was inside Vivendi. The investor's move also reflects concerns over the outsize influence and strategy of Vincent Bolloré, the French financier and Vivendi chairman. Mr Bolloré has built a stake of more than 8 per cent in Vivendi.
PSAM has valued UMG at close to €9bn, including debt. Based on operating cash flow estimates it expects the enterprise value to increase to €12.3bn by 2018. In 2013, Vivendi rejected an $8.5bn offer for the company from SoftBank, the Japanese telecoms group.
PSAM has been a shareholder at Vivendi for three years and says it launched its campaign, first reported by the FT, after becoming disillusioned with the company's share price performance. PSAM controls 0.8 per cent of Vivendi.
Read MoreVivendi sheds broadband unit; Spain's Telefonica pays nearly $10 bln
The $3.4bn hedge fund, founded by Peter Schoenfeld, has submitted two resolutions for consideration at Vivendi's annual shareholder meeting next month. The resolutions demand the group return €9bn of its €15bn cash pile to shareholders.
It argued the group has an intrinsic value of €25-€27.50 per share. Vivendi shares rose more than 3 per cent on Monday to hit a six-year high of €22.90.
Vivendi hit back at PSAM on Monday, saying its dividend policy was "well balanced". The majority of its shareholders supported the media and content group's medium-term strategy, it said.
In its investor presentation, PSAM said UMG "would benefit from operating and structural advantages as an independent company".
More from the FT:
Vivendi hits back at activist investor
'Quiet professor' seeks Vivendi shake-up
Vivendi — other people's money
UMG is responsible for more than 30 per cent of the US music market and has a similar share of European markets, such as the UK and France. Like other labels, it has endured a tough decade, absorbing piracy, the decline of CD sales and the transition to a digital music business model.
However, the music industry has great hopes for streaming music, which is fast catching up to digital downloads as its largest source of revenues.
UMG is renegotiating streaming licences with Spotify, the world's largest streaming music service. The PSAM investor presentation says an independent UMG would become "an attractive strategic acquisition target for companies with digital streaming platforms".
Streaming services will lift music industry revenues by 80 per cent over the next five years, PSAM says in the presentation, citing new streaming services that will be launched from Apple and Google's YouTube. "Google, Apple and independent services such as Spotify cannot be viable streaming businesses without a rights agreement with UMG," it says.
John Malone's Liberty Media would be a "natural" buyer for UMG, according to a person close to key Vivendi investors.