Although hipgnosis Songs Fund has been exceptionally quiet in the last six months of its fiscal year, the company that has helped propel the value of music catalogs in recent years has seen its value increase by nearly 5.5% and recorded a gain of 24% of its gross income, according to its just-released annual report.
External appraiser quoted in the report, Barry Massarsky, a partner at New York-based Massarsky Consulting, estimates the value of London-based Hipgnosis at US$2.69 million, a gain of $140 million for the year ended March 31. This is despite taking half a year off its virtually uninterrupted shopping spree, which over the years has attracted the assets of songwriters and artists such as Nile Rogers, Barry Manilow, the Chainsmokers, Neil Young, Shakira, Stevie Nicks and Lindsey Buckingham.
The report not only reveals a 24% gain in gross revenue, to $22.4 million, but a 9.5% improvement in the value of its portfolio to $2.7 billion, while its operational net asset value (NAV) settled at $1.8491 per share, above the projected yield of $1.751. Operating value reflects a total return of 9.2% in the second half of Hipgnosis’ fiscal year and 14.2% for the full year.
While its acquisition pace eased in the second half, the company still landed eight key assets during the year, including Red Hot Chili Peppers, Fleetwood Mac’s Christine McVie, Rhett Akins, the Monsters & Strangerz (Stefan and Jordan Johnson), Elliot Lurie, Heart’s Ann Wilson and Kaiser Chiefs. The company cites better-than-expected song streaming growth as a factor not only in its performance during the fiscal year, but names it and the recent confirmation of higher royalty rates by the U.S. Copyright Royalty Board as reasons. of his future optimism.
The company manages more than 65,000 songs from more than 150 catalogs, whose annual report cites bragging rights such as 67 of the 271 songs that have a billion plays on Spotify, 13 of the most-watched videos of all time on YouTube, 3,854 No. 1s on the global charts and 156 Grammy-winning songs.
“Over the past four years, we have acquired an unrivaled portfolio of some of the most successful and culturally significant songs of all time, today valued at $2.7 billion,” said the founder and CEO. Merck Mercuriadis, among the statements he shares in the annual report. “The unique strength of our catalog is demonstrated by the 9.9% increase in operating net asset value to $1.8491 per share, as reported by our independent portfolio evaluator, and a total net asset value return of 14 .2%.
“This is largely due to our signature songs outpacing overall streaming market growth, particularly in the second half of 2021, which validates our investment strategy.”
Although Hipgnosis Songs Fund took a break from landing catalogs, linked fund Hipgnosis Songs Capital, a private fund backed by investment firm Blackstone, was on the lookout and picked up catalogs, including the Leonard Cohen estate in March and Justin Timberlake in May.
Says another statement from the report, attributed to Mercuriadis, “In October 2021, the investment adviser … was appointed to act for a second fund (Hipgnosis Songs Capital, which invests funds managed by global alternative investment manager Blackstone) . Additionally, Blackstone took a stake in the investment adviser.
“We view this investment as a major vote of confidence in Hipgnosis Songs Fund, the asset class we have established and our investment strategy. Additionally, the investment made by Blackstone has already enabled us to make additional investments. significant improvements in the investment advisor’s most important capabilities, including data analysis, investment processes, song management, and communication.Shareholders of the Hipgnosis Songs Fund will directly benefit from these enhanced capabilities.
In addition to its relationship with Blackstone, Hipgnosis Songs Fund is advised by Singer Capital Markets, JP Morgan Cazenove and RBC Capital Markets.
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