Music intellectual rights specialist Hipgnosis Song Management and NYSE-traded investment manager Blackstone announced a new partnership on Tuesday, backed by funds managed by Blackstone, which would initially deliver $1bn (£0.73bn) to acquire music rights and manage catalogues.
The FTSE 250 listed Hipgnosis Songs Fund is managed by Hipgnosis Song Management, which was previously known as The Family Music.
As part of the partnership, Blackstone would take an ownership stake in Hipgnosis Song Management and would support the expansion of its infrastructure and business functions, including the development of new song management expertise, data science capabilities and technology solutions.
That, the companies said, would allow Hipgnosis to further enhance the value of the rights it purchases, working in close collaboration with songwriters, artists and producers.
“Hipgnosis Song Management has firmly established songs as an asset class,” said its chief executive officer and founder Merck Mercuriadis.
“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 (SONG).
“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.”
Qasim Abbas, senior managing director of Blackstone Tactical Opportunities, said the partnership underscored the long-term, sustainable value Blackstone saw in creative content across the wider entertainment industry.
“The music industry has been at the forefront of the fast-growing streaming economy and is unlocking new ways of consuming content.
“We look forward to working with Merck and his team to continue their exciting journey and safeguard the legacy of the songwriters that entrust us with their content,” Abbas added.
Hipgnosis Songs Fund was expected to benefit from Blackstone’s investment in Hipgnosis Song Management’s capabilities, and would have the right to co-invest in future catalogue acquisitions alongside the new Blackstone-Hipgnosis partnership.
“Our investment adviser’s new partnership with Blackstone highlights how successfully Merck has established songs and music rights as an asset class since founding and listing SONG three years ago,” said Hipgnosis Songs Fund chairman Andrew Sutch.
“This new partnership will provide new co-investment opportunities for SONG, and we expect that continued investment in Hipgnosis Song Management will enhance returns for our investors.”
At 1419 BST, shares in Hipgnosis Songs Fund were up 2.33% at 123p.
