Blackstone invests $ 1 billion in music through Hipgnosis. Are billions more on the way?
No doubt about it – this is bestselling news.
Blackstone, one of the world’s most powerful financial players, has confirmed that it is investing around $ 1 billion to acquire the music rights through a partnership with Merck Mercuriadis.
MBW has confirmed that this money will go into a new private fund, Hipgnosis Songs Capital.
Hipgnosis Songs Capital is a separate entity from the Hipgnosis Songs Fund (SONG), run by Mercuriadis, which is listed on the London Stock Exchange and has invested around $ 2 billion in music rights to date.
In addition, Blackstone invests an undisclosed sum of money in the investment management / advisory firm of Mercuriadis, formerly known as The Family (Music) Ltd, and now known as Hipgnosis Song Management (HSM ).
Hipgnosis Song Management will thus become the exclusive investment management partner for the two Hipgnosis Songs Fund and Hipgnosis Songs Capital, supported by Blackstone.
Blackstone’s billion dollar investment is a game-changer for the music industry… but don’t expect his bankroll to end there. The company is ready to invest larger sums in music rights – possibly several Billions more – via Hipgnosis Songs Capital in the years to come.
Qasim Abbas, Senior Managing Director, Blackstone Tactical Opportunities, led the new partnership agreement with Mercuriadis.
“What we’re looking to do – as a starting point, really – is acquire about a billion dollars worth of catalogs. [But] this is just the beginning – Our ambition is much more substantial.
Qasim Abbas, Black Stone
Speaking to MBW in an exclusive interview, Abbas told us, “At this point what we’re looking to do – as a starting point, really – is to acquire about a billion dollars. [worth] catalogs. I want to stress that this is only the beginning. Our ambition is much more substantial than that.
And we certainly shouldn’t overlook the extra bit of change Blackstone is injecting into Mercuriadis’ investment management firm, Hipgnosis Song Management.
Abbas did not confirm a figure for this investment, but spoke of a large-scale ambition for HSM, which – in addition to researching catalogs to buy – is responsible for maximizing commercial returns from all music rights under the Hipgnosis name, whether through royalties, sync licenses or other activities.
“We are going to invest substantial sums in Hipgnosis Song Management in order to develop and develop its various capacities for the next [level]”Abbas said.” The shared vision is to create the best-in-class platform, with a substantial scale and a skill set unmatched in the market. “
Blackstone says the Hipgnosis Song Management investment plan will include “developing new song management expertise, data science capabilities, and technology solutions,” which he notes, “should enable HSM to further improve the value of the rights it purchases, working closely with songwriters, artists and producers ”.
“This new partnership with Blackstone will provide financial strength to invest in proven songs, grow our song management team, and bring additional sophistication to HSM.”
Merck Mercuriadis, Hipgnose
We are told that the publicly traded Hipgnosis Songs Fund 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 provide financial strength to invest in proven songs, grow our song management team and bring additional sophistication to HSM, enabling us to create greater value for our stakeholders, including our songwriters. and shareholders in [Hipgnosis Songs Fund].
“Given the strength of our pipeline, we view the initial engagement as the start of a long-term partnership between Blackstone and Hipgnosis which will also include a co-investment with SONG. “
Qasim Abbas added, “This partnership underscores the long-term, sustainable value we see in creative content across the entertainment industry, building on the vision and drive of Merck. The music industry has been at the forefront of the growing streaming economy and opening up new ways to consume content.
“We look forward to working with Merck and his team to continue their exciting journey and safeguard the legacy of the songwriters who entrust their content to us.”
Andrew Sutch, President of Hipgnosis Songs Fund, said: “Our investment advisor’s new partnership, Hipgnosis Song Management, with Blackstone shows how successful Merck has been in establishing the rights to songs and music as a class. assets since the creation and listing of SONG three years ago.
“This new partnership will provide new co-investment opportunities for SONG, and we expect continued investment in Hipgnosis Song Management will improve returns for our investors. “
Blackstone was advised on the transaction by Goldman Sachs, FTI, Kirkland & Ellis and Deloitte. Hipgnosis Song Management has been advised by RBC, Capstan Capital Partners and Stephenson Harwood.
Find our full interview with Qasim Abbas and Merck Mercuriadis on the new partnership between Hipgnosis and Blackstone later today on MBW.
The investment space for the music catalog has had a particularly busy week.
In addition to today’s explosive Hipgnosis / Blackstone news, we learned that KKR is said to be in advanced negotiations to buy a catalog from Kobalt Capital for around $ 1 billion.
Elsewhere, New York-based Apollo Global Management is investing up to $ 1 billion in HarbourView, a new music rights and multimedia content company led by Sherrese Clarke Soares, the former director of Tempo Music Investments.
And in recent days, BMG (for a stake in the rights to Tina Turner) and Primary Wave (for a stake in the rights to Bing Crosby) have both announced deals worth more than $ 50 million each.Music trade around the world