Offering investors a pure-play exposure to songs and associated intellectual property rights, Hipgnosis, one of Shares’ recent Great Ideas selections, collects royalties on thousands of popular songs.
This helps to fund an attractive stream of dividends and makes the music royalty fund attractive in an environment where dividends are being cut by many companies.
A ‘RARE ARTIST’
‘Barry Manilow is an international treasure,’ enthused Merck Mercuriadis, the founder of Hipgnosis and its investment adviser The Family (Music) and a one-time manager of Elton John and Iron Maiden.
Mercuriadis, who will only buy the rights to successful songs for the fund, added that Manilow is ‘an incomparable artist, songwriter, arranger, musician and performer. In the 1970s and 80s he redefined mainstream entertainment and drove it to new heights of success with truly classic songs. From ‘Mandy’ to ‘I Write The Songs’, ‘Copacabana’ and ‘Looks Like We Made It’, he is one of those rare artists that unites everyone.’
Manilow is an amazing addition to the Hipgnosis catalogue, having has sold more than 85 million records and standing tall as one of the world’s bestselling recording artists of all time.
The fund has snapped up 100% of Manilow’s worldwide recording royalties, excluding sound exchange royalties, in his catalogue comprising 917 songs.
CASHED UP AND DEAL-HUNGRY
Hipgnosis owns the rights to certain pieces of music and receives a royalty payment each time they are played on the radio, streamed online, feature in adverts, films, TV programmes or computer games, or are bought on CDs or vinyl.
It has raised over £860 million through its summer-of-2018 IPO and subsequent issues in April 2019, August 2019, October 2019 and this July, when it raked in £236.4 million by issuing new stock at 100p per share. Of that amount, £3 million came from enthusiastic retail investors.
Following this impressive spate of acquisitions and capital raises over the past 2 years, other music royalty firms, who typically focus on older vintage songs, are thought to be considering IPOs, which may increase competition for assets in the future.