Hipgnosis Songs Fund

Hipgnosis Songs Fund is a British Guernsey-registered music IP investment and song management company founded by Merck Mercuriadis and co-founded by Nile Rodgers in 2018. Focused on songs and associated musical intellectual property rights, it was founded on the premise that hit songs are long-term predictable assets unaffected by economic cycles that will increase in value as the worldwide music streaming market grows.[3] In addition to acquiring songs and songwriter catalogues, the company manages the playlist, cover, interpolation, and synchronization revenues of its IP.[4][5]

Hipgnosis Songs Fund Limited
Traded asLSE: SONG
IndustryMusic publishing, IP investments
Founded2018, in London
FounderMerck Mercuriadis
HeadquartersLondon, England,
London
,
England
Area served
Worldwide
Key people
Merck Mercuriadis (founder and CEO)
Nile Rodgers (co-founder)
Andrew Sutch (non-executive chair)[1]
Revenue£65.661 million (2020)[2]
£32.668 million (2020)[2]
£25.194 million (2020)[2]
Websitewww.hipgnosissongs.com

Hipgnosis Songs Fund has raised nearly £862 million to fund acquisitions since it was established in 2018.[6] At the close of its first full year as a publicly traded company, its catalogue totaled more than 5,000 songs; of those, approximately 2,000 had been #1 hits somewhere in the world, and 4,000 had reached the Top 10.[7] Five songs co-owned by Hipgnosis Songs Fund appeared in the Top 10 on the Billboard Hot 100 of the decade chart.[8] In July 2020, it was reported that the Hipgnosis music rights portfolio, consisting of approximately 13,300 songs, had been independently valued at more than £760 million.[9][2]

Hipgnosis Songs Fund was listed on the main market of the London Stock Exchange in July 2018 and transferred to the premium segment of the main market in November 2019. It has been a constituent of the FTSE 250 Index since March 2020.[10][11]

History

Hipgnosis Songs Fund was founded by Merck Mercuriadis, who has managed artists including Elton John, Iron Maiden, Morrissey, Beyoncé, and Nile Rodgers. Mercuriadis stated in a February 2019 interview: "Nile (Rodgers) and I, one day, just started riffing off of these ideas of how do we change this system, how do change what’s going on today where the songwriter – who provides the most important component in an artist having success –  is the lowest person on the totem pole?" [12] Mercuriadis believed that a rights and song management company with substantial assets could change the existing economics of publishing for songwriters, and in 2018, building capital by offering investors pure-play exposure to songs and associated musical intellectual property rights in place, Hipgnosis Songs Fund was formally founded.[13] The company was named after Hipgnosis, the art and design group founded by Storm Thorgerson and Aubrey Powell.[14] The Family (Music) Limited, an advisory board that included Mercuriadis, Rodgers, Starrah, The-Dream, David A. Stewart, Nick Jarjour, Bill Leibowitz, and Ian Montone was established in 2018. Rodney Jerkins joined the advisory board in July 2020.[15]

Hipgnosis Songs Fund went public in July, 2018; an earlier plan to float the company in the UK had been postponed to conduct further due diligence.[16] Its prospectus stated that there was a "unique market opportunity as technology disruption is changing the way music is consumed." [17] At its July 10, 2018 launch on the British Stock Exchange, Hipgnosis Songs Fund raised £202m, well over its goal. Trading as SONG, it was one of two investment trust IPOs that were oversubscribed that year.[18] Following the listing, the company reported that it had acquired a 75 percent interest in its first music rights catalog from musician The-Dream for £18.83 million. Among other hits, the 302-song collection included Justin Bieber's "Baby", Rihanna's "Umbrella" and Beyonce's "Single Ladies (Put a Ring on It)”.[19]

By the end of 2018, Hipgnosis acquired the Poo Bear catalogue of 214 songs, including Justin Bieber's "What Do You Mean?" and the English language version of "Despacito"; a 37.5% stake in Chic co-founder Bernard Edwards' catalogue, which comprised 290 songs including "Everybody Dance", "Le Freak," "I Want Your Love" and "Good Times"; the 121-song catalogue of TMS, including "Don't Be So Hard On Yourself" for Jess Glynne, and "Wings" and "DNA" for Little Mix; and the 121-song catalogue of Tricky Stewart, who co-wrote many of The-Dream's hit songs, including "Me Against the Music" (by Britney Spears and Madonna), and Mariah Carey's "Touch My Body."[20] Prior to a second raise of £146.5 million in April 2019, Hipgnosis acquired the 182-song catalogue of Giorgio Tuinfort, including more than 15 UK Top 10 singles with David Guetta; Itaal Shur (209 songs, including "Smooth"), the 249-song catalogue of Johnta Austin, ("We Belong Together" by Mariah Carey, "Be Without You" by Mary J Blige); 588 songs by Sean Garrett, including "Yeah", Ciara's "Goodies, and "Check on It by Beyoncé; and the 245 song catalogue of Rico Love, including ""Without You" by David Guetta.[20][21] In October 2019, the company acquired Timbaland's catalogue, which included all six albums by Missy Elliot, and the five Justin Timberlake albums that Timbaland produced.[22] The catalogue comprises 108 albums and songs with collective sales in excess of 32 million.[23] Five songs co-owned by Hipgnosis appeared in the Top 10 on Billboard's Hot 100 of the decade chart. (The Chainsmokers ft. Halsey's "Closer", "Uptown Funk" by Mark Ronson, "Shape of You" by Ed Sheeran, Maroon 5 ft. Cardi B, "Girls Like You", and "Despacito" by Luis Fonsi & Daddy Yankee ft. Justin Bieber).[24] In December 2019, Hipgnosis added the first four studio albums by Kaiser Chiefs,[25] and the songwriting catalogue of Jack Antonoff to its repertoire.[26]

Hipgnosis raised £49.9 million in August 2019, and an additional £233.7 million in October,[27] bringing its "acquisition warchest" to nearly £650 million. As of October 2019, Hipgnosis Songs Fund holdings included more than 6000 songs, with hits from every decade since the 1950s, valued at £1.2 billion.[6] In November 2019 the company was admitted to the London Stock Exchange Premium Segment of the Official List on the completion of four equity fundraises since its' launch in June 2018.[28]

In January 2020, blink-182 guitarist Tom DeLonge sold his publishing rights to Hipgnosis.[29] In April 2020 the company acquired 70% of Mark Ronson's catalogue.[30][31]

On July 2, 2020, to fund new investments to build a "pipeline of catalogs with an acquisition value of over £1bn," Hipgnosis announced that it sought to raise an additional £200 million through issuing a new tranche of class C shares. On July 7, following the release of its FY2020 annual report—which disclosed that Hipgnosis had generated £65.661 million in revenue during its 2020 fiscal year—the company's share price hit an all-time high, resulting in a valuation of nearly £1 billion.[32][33]

Hipgnosis exceeded its July 2020 fundraising goal of £200 million after its new share placing was oversubscribed. The company raised £236.4 million, its largest equity raise, bringing Hipgnosis' total raise to more than £862 million.[34] It subsequently acquired the catalogs of Jerkins, RedOne, and Barry Manilow.,[35][36][9] bringing its portfolio to approximately 13,300 songs.[32]

Portfolio

The portfolio includes:

References
  1. Aswad, Jem (2019-08-27). "Hipgnosis Songs Raises Another $63 Million". Variety. Retrieved 2020-07-09.
  2. "Hipgnosis revenues topped $80m in FY2020 – now it's raising another $250m". Music Business Worldwide. 2020-07-03. Retrieved 2020-07-07.
  3. "Hipgnosis: Sweet dreams are made of song royalties". Wealth Manager. Retrieved 2019-10-04.
  4. Harley-McKeown, Mischa Frankl-Duval and Lucy. "Investors in Search of Yield Turn to Music-Royalty Funds". WSJ. Retrieved 2019-10-01.
  5. "Business interview: Music man turning up the volume on the hit parade". Evening Standard. 2018-10-26. Retrieved 2019-10-01.
  6. Aswad, Jem (2019-10-17). "Hipgnosis Songs Raises Another $295 Million". Variety. Retrieved 2019-10-18.
  7. Johnston, Chris (2019-06-17). "Going for a song: The £350m fund making money from pop hits". The Telegraph. ISSN 0307-1235. Retrieved 2019-10-03.
  8. Ingham, Tim (2019-12-11). "Having spent $665m on songs, Hipgnosis now owns slices of Shape Of You and Uptown Funk". Music Business Worldwide. Retrieved 2020-03-06.
  9. "Barry Manilow Sells Song Catalog to Hipgnosis". Variety. 2020-08-03. Retrieved 2020-08-03.
  10. "FTSE UK Index Series - Quarterly Review March 2020". 4 March 2020. Retrieved 6 March 2002.
  11. "Hipgnosis Song. Regulatory News. Live SONG RNS. Regulatory News Articles for Hipgnosis Songs Fund Limited Ord Npv". www.lse.co.uk. Retrieved 2020-07-09.
  12. "A Conversation with Nile Rodgers and Merck Mercuriadis". Thought Economics. 2019-02-27. Retrieved 2019-10-01.
  13. "Industry Bomb Thrower Merck Mercuriadis On Disrupting The Music Business [INTERVIEW]". hypebot. Retrieved 2019-10-04.
  14. Evans, Peter (2019-03-17). "Interview: Merck Mercuriadis, the man mining gold from old hits". The Sunday Times. ISSN 0956-1382. Retrieved 2019-10-03.
  15. "Hipgnosis Songs Fund buys music catalog from Grammy-winning songwriter & producer Rodney Jerkins". Music Business Worldwide. 2020-07-29. Retrieved 2020-08-03.
  16. "Music veteran's Hipgnosis trust returns for second attempt at IPO". www.investmentweek.co.uk. 2018-06-27. Retrieved 2019-10-04.
  17. "Intention to Float - RNS - London Stock Exchange". www.londonstockexchange.com. Retrieved 2019-10-04.
  18. "Going for a song − the Hipgnosis Songs Fund". Master Investor. 2019-04-24. Retrieved 2019-10-04.
  19. Reid, David (2018-07-11). "Investment fund backed by song royalties signs up hits from major stars". CNBC. Retrieved 2019-10-04.
  20. "The facts and figures on the Hipgnosis publishing revolution". www.musicweek.com. Retrieved 2019-10-04.
  21. "Hipgnosis Songs Raises $185 Million to Acquire More Hits". Billboard. Retrieved 2019-10-04.
  22. "Hipgnosis Acquires Timbaland Catalog". Billboard. Retrieved 2019-10-16.
  23. Aswad, Jem (2019-10-16). "Hipgnosis Songs Acquires Timbaland Catalog". Variety. Retrieved 2019-10-16.
  24. "Hot 100 Songs : Page 1". Billboard. Retrieved 2019-11-18.
  25. Andy Malt (2019-12-11). "Hipgnosis acquires Kaiser Chiefs master rights". Complete Music Update. Retrieved 2020-03-06.
  26. "Hipgnosis Acquires Jack Antonoff Catalog, Including Hits for Taylor Swift and Fun". Billboard. Retrieved 2020-03-06.
  27. "Merck Mercuriadis' Hipgnosis raises another $295m". Music Business Worldwide. 2019-10-17. Retrieved 2019-10-18.
  28. "London Stock Exchange admits Hipgnosis Songs Fund to Premium Segment of Official List". Music Business Worldwide. 2019-11-18. Retrieved 2019-11-18.
  29. "Hipgnosis Snags 'All the Small Things' & More By Former Blink-182 Member Tom DeLonge". Billboard. 2020-01-07. Retrieved 2020-03-06.
  30. Millman, Ethan (2020-04-23). "Mark Ronson Joins the Slate of Hit Artists Selling Their Songs to Merck Mercuriadis". Rolling Stone. Retrieved 2020-08-03.
  31. "Hipgnosis Songs Acquires 70% of Mark Ronson's Publishing Catalog". Variety. 2020-04-23. Retrieved 2020-04-23.
  32. "Hipgnosis market cap tops $900m as share price hits all time high". Music Business Worldwide. 2020-07-06. Retrieved 2020-07-08.
  33. "Hipgnosis revenues topped $80m in FY2020 – now it's raising another $250m". Music Business Worldwide. 2020-07-03. Retrieved 2020-07-08.
  34. "Hipgnosis exceeds £200m fundraising target". www.musicweek.com. Retrieved 2020-07-13.
  35. "Royalties investment firm buys catalogue of Lady Gaga collaborator". the Guardian. 2020-07-16. Retrieved 2020-08-03.
  36. "Publishing Briefs: Rodney Jerkins Puts Hipgnosis Under His Spell, Primary Wave Acquires Stake in Devo". Billboard. 2020-07-30. Retrieved 2020-08-03.
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