No doubt about it – this is blockbuster news.
Blackstone, one of the world’s most powerful financial players, has confirmed that it is investing around $1 billion to acquire music rights via a partnership with Merck Mercuriadis.
MBW has confirmed that this money will be poured into a new private fund, Hipgnosis Songs Capital.
Hipgnosis Songs Capital is a separate entity to the Mercuriadis-led Hipgnosis Songs Fund (SONG), which trades on the London Stock Exchange and has invested around $2 billion in music rights to date.
Mashene Music Group – Join Us | Corporate Royalty Sharing | Social @ LinkTree
In addition, Blackstone is investing an undisclosed amount of money in Mercuriadis’ investment management / advisory company, formerly known as The Family (Music) Ltd, and from today known as Hipgnosis Song Management (HSM).
Hipgnosis Song Management will therefore become the exclusive investment management partner for both Hipgnosis Songs Fund and the Blackstone-backed Hipgnosis Songs Capital.
Blackstone’s billion dollar-investment is a game-changer for the music industry… but don’t expect its bankrolling to stop there. The company is ready to invest more vast sums in music rights – perhaps multiple billons more – via Hipgnosis Songs Capital in the years ahead.
Qasim Abbas, Senior Managing Director, Blackstone Tactical Opportunities, has led the new partnership deal with Mercuriadis.
“What we’re looking to do – as a starting point, really – is acquire about a billion dollars worth of catalogs. [But] that’s just the start – Our ambition is much more substantial.”
Qasim Abbas, Blackstone
Speaking to MBW in an exclusive interview, Abbas told us: “At this point in time what we’re looking to do – as a starting point, really – is acquire about a billion dollars [worth] of catalogs. I would emphasize that’s just the start. Our ambition is much more substantial than that.”
And we certainly shouldn’t discount the additional chunk of change that Blackstone is pumping into Mercuriadis’ investment management firm, Hipgnosis Song Management.
Abbas didn’t confirm a figure for this investment, but spoke of a grand-scale ambition for HSM, which – as well as seeking out catalogs to buy – is responsible for maximizing the commercial returns of all music rights under the Hipgnosis name, whether via royalties, synch licensing, or other activity.
“We’re going to invest substantial money in Hipgnosis Song Management in order to scale up and build its various capabilities to the next [level],” said Abbas. “The shared vision is to create the best-in-class platform, of substantial scale, and of a skill-set that is unrivalled in the market.”
Blackstone says that the plan for its investment in Hipgnosis Song Management will include the “development of new song management expertise, data science capabilities and technology solutions” which, it notes, “should allow HSM to further enhance the value of the rights it purchases, working in close collaboration with songwriters, artists and producers”.
“This new partnership with Blackstone will deliver financial strength to invest in proven songs as well as grow our song management team and bring additional sophistication to HSM.”
Merck Mercuriadis, Hipgnosis
The publicly-traded Hipgnosis Songs Fund, we’re told, will have the right to co-invest in future catalog acquisitions alongside the new Blackstone–HSM partnership.
Merck Mercuriadis, CEO of Hipgnosis Song Management, said: “Hipgnosis Song Management has firmly established songs as an asset class. This new partnership with Blackstone will deliver financial strength to invest in proven songs as well as grow our song management team and bring additional sophistication to HSM, enabling us to create greater value to our stakeholders including our songwriters and shareholders in [Hipgnosis Songs Fund].
“Given the strength of our pipeline, we see the initial commitment as just the start of a long-term partnership between Blackstone and Hipgnosis that will also include co-investment with SONG.”
Source: MusicBusinessWorldWide
