Although Hipgnosis Songs’ fund was unusually quiet in the last six months of its fiscal year, the company that has helped drive the value of music catalogs in recent years saw its value grow by nearly 5.5%, and took a 24% profit on gross receipts, of according to its annual report which has just been released.
The external appraiser cited in the report, Barry Massarsky, a partner at New York-based Massarsky Consulting, values London-based Hipgnosis at $2.69 million, indicating a profit of $140 million dollars in the fiscal year ended March 31. And that’s despite taking half a year off from his almost non-stop shopping life, which has amassed the assets of songwriters and artists like Nile Rogers, Barry Manilow, The Chainsmokers, Neil Young, Shakira, Stevie Nicks and Lindsey Buckingham over the years.
The report reveals not only a 24% increase in gross receipts, to $22.4 million, but a 9.5% improvement in the value of its portfolio, to $2.7 billion, and its Net Operating Asset Value (NAV) came in at $1.8491 per share, above. the expected return $1.751. Operating value represents a total return of 9.2% in the second half of Hipgnosis’ fiscal year, and 14.2% for the full year.
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Although the pace of acquisitions slowed in the second half of the year, the company acquired eight key assets during the year, including the Red Hot Chili Peppers, Christine McVie of Fleetwood Mac, Rhett Akins, the Monsters & Strangerz (Stefan and Jordan Johnson), Elliot Lurie, Ann Wilson from Heart and Kaiser Chiefs. The company cites better-than-expected growth in song streaming as a factor not only in its fiscal year results, but names it, along with the recent confirmation of higher royalty rates from the US Copyright Royalty Board , as reasons for the future hope.
The company manages more than 65,000 songs from more than 150 catalogs, which the annual report mentions proud of 67 of the 271 songs that registered a billion plays on Spotify, 13 of the most viewed videos on YouTube ever, 3,854 numbers. 1s on the world charts and 156 Grammy winning songs.
“Over the past four years, we have acquired an unparalleled portfolio of some of the most successful and culturally important songs of all time, now valued at $2.7 billion,” says Merck founder and CEO Mercuiadis, among the remarks he shares in the annual report. . “The unique strength of our portfolio is demonstrated by a 9.9% increase in operating NAV to $1.8491 per share, as reported by our independent portfolio valuer, and a total NAV return of 14.2%.
“This is largely due to our iconic songs outperforming the overall growth of the streaming market, particularly in the second half of 2021, providing validation of our investment strategy.”
While Hipgnosis Songs Fund has taken a break from acquiring catalogs, Hipgnosis Songs Capital, a private fund backed by investment firm Blackstone, is on the lookout and has acquired catalogs, including those of Leonard Cohen in March and Justin Timberlake in the month of May.
Another statement in the report, attributed to Mercuriadis, reads: “In October 2021, the investment adviser… was appointed to act on behalf of the second fund (Hypgnosis Songs Capital, which invests funds managed by the global alternative investment manager Blackstone ). , Blackstone participated in the investment advisory.
“This investment is seen as a significant vote of confidence in the Hipgnosis Song Fund, our established asset class and our investment strategy. Additionally, Blackstone’s investment has already enabled us to make significant further investment in core capabilities .” Investment Advisor, including data analysis, investment processes, song management and communication. Hipgnosis Song Fund shareholders will benefit directly from these enhanced resources.”
In addition to their relationship with Blackstone, the Hipgnosis Songs fund has been recommended by Singer Capital Markets, JP Morgan Cazenove and RBC Capital Markets.