Uncover the top players dominating the music royalty investment landscape.
Investing in music catalogues has emerged as a lucrative opportunity for savvy investors seeking alternative assets. Recent acquisitions of both historic performers and the latest chart-toppers’ catalogues have dominated headlines, highlighting the growing fascination for these investments. In this article, we aim to provide a comprehensive list of the current key players in the music royalty investment landscape.
The surge in music royalties’ investments stems from the attractiveness of such investments amid a period of stagnated economic growth. To put things into perspective, in September 2020, the US 10-year Treasury yield stood at 0.7%, while Hipgnosis Songs Fund’s (SONG) dividend yield reached 4.3%. To find out what is enticing to music royalty investors and the role they play within the music industry, read our previous article, “The Role Of Investment Funds In The Music Industry”.
While the exact number of funds investing in these assets remains somewhat elusive, there are several well-known players dominating the scene. Let’s kick things off with the heavyweights.
Hipgnosis Songs Fund, founded by Merck Mercuriadis, made its grand entrance onto the London Stock Exchange in 2018. The fund currently owns 146 catalogues, with over 65,413 songs, 156 of which are Grammy winning tracks. Hipgnosis Songs Fund holds rights to catalogues from legendary artists such as Blondie, Shakira, 50 Cent, and the Red Hot Chili Peppers.
Harbourview Equity is a relative newcomer that wasted no time in making its mark. Formed in 2021, it already commands $1 billion of investable capital. Besides its various investments in music-related businesses, like the recently announced investment in MACRO, it’s their catalogues that really strike a chord. HarbourView holds catalogues comprising works by Luis Fonsi, Brad Paisley, and a stake in Justin Bieber’s catalogue.
Venturing further into the realm of music royalty investments, we encounter Lyric Capital Group, a private equity firm making waves in the industry. Founded in 2018, Lyric Capital recently made headlines by raising an impressive $800 million in a music royalty fund dedicated to acquiring catalogues. Some of the company’s repertoire includes artists like The Who, Ed Sheeran, John Legend, Chicago, The Go-Go’s, Faith Hill, Tim McGraw, Camilla Cabello, Jay-Z. However, details regarding its specific acquisitions are currently shrouded in mystery, as there isn’t much publicly available information.
Kobalt Capital Ltd. (KCL), established in 2011, serves as the regulated investment advisor for various music royalty funds within Kobalt Music. Founded two decades ago by Swedish entrepreneur Willard Ahdritz, Kobalt Music has entrusted KCL with overseeing its investment ventures. By 2017, they had already poured over $350 million into music rights through acquisitions and advances.
Round Hill Music Fund Limited (RHM) is an NY’s investment company with a truly global footprint. With offices in Nashville, Los Angeles, and London, RHM’s team has completed over 125 catalogue transactions, collectively exceeding the $1 billion mark. Their impressive portfolio comprises approximately 150 catalogues housing over 200,000 musical compositions, from artists such as Peggy Lee, The Beatles, The Rolling Stones, and Louis Armstrong.
Another notable New York-based investment company is CatchPoint Rights Partners. Uniting an eclectic mix of genres under their curation, CatchPoint Rights Partners acquires and nurtures a portfolio that encompasses more than just music rights. Their diverse collection includes tracks by multiple Grammy winners and Billboard chart-toppers, including Avril Lavigne, Chet Faker, Gwen Stefani, and Queens of the Stone Age.
Primary Wave Music is an independent publisher and talent management company that simultaneously manages a notable song catalogue. Their extensive collection features works from iconic performers and songwriters such as Prince, Bob Marley, James Brown, and Ray Charles, to name just a few. In November, Primary Wave caused ripples with its acquisition of a 50% stake in Whitney Houston’s assets for a cool $14 million, signalling their commitment to breathing new life into her estate.
While the firms we just mentioned mainly invest in the music industry, there’s a noteworthy trend of investment companies from more traditional sectors exploring opportunities within the music rights landscape.
Blackstone and BlackRock stand as prime examples of major investment companies – as of March 2023, Blackstone managed $991 billion in assets. While traditionally focused on sectors like energy and real estate, Blackstone made headlines in October 2021 with its partnership announcement alongside Hipgnosis Songs Fund. The collaboration aimed to provide approximately $1 billion to “acquire music rights and manage catalogues” – a shift in their investment strategy. BlackRock portfolio includes hits by Bob Dylan, Sting, David Bowie, Aerosmith, and others.
During the same period, KKR and Dundee Venture Capital, with a combined $511 billion of assets under management, announced a “multi-year agreement” with Kobalt Capital.This strategic move led to the acquisition of Kobalt’s KMR Music Royalties II portfolio by both Dundee and KKR, amounting to a jaw-dropping $1.1 billion deal. This catalogue encompassed over 62,000 copyrights, including tracks of artists such as The Weeknd, Lorde, and the legendary Paul McCartney.
Other players in the music rights investment sphere include smaller and lesser-known equity firms and music companies like Mills Music Trust and Alternative Partners. However, limited information is available regarding the composition of their catalogues.