4 ms·

He raised $1B of others' money; he hasn't spent anything close to that yet, even in aggregate. The article is extremely light on details of why this guy thinks

He raised $1B of others' money; he hasn't spent anything close to that yet, even in aggregate. The article is extremely light on details of why this guy thinks he can turn a bigger profit off these song catalogs than the traditional publishers can, but I guess he's cutting a lot of fat compared to the big publishing houses? This seems positive to me because it's shifting more money towards the artists: "In the music industry, paying for assets at a 10x multiple is considered top dollar. Mercuriadis is reportedly paying up to 20x, making it impossible for others to compete."

nickthemagicman 7y ago
That's optimistic of you to think that he's going to give more profits to the artist.
- cpach 7y ago
  Nitpick: To the songwriters.
- zaroth 7y ago
  If he’s paying 20x multiples versus 10x multiples than that is exactly what is happening. His investors take all the risk on trying to make a return on that investment, the songwriter gets paid double up front.
mrnobody_67 7y ago
His big bet is that the assets are undervalued... Could end up exiting through the launch of a Music Royalties REIT. Liquid assets that trade always get a premium over illiquid limited partnerships. Could be an interesting asset class for diversification that's relatively uncorrelated... Anyway, full investment prospectus for his fund is here: https://static1.squarespace.com/static/5937f2f1bebafb1297678ff8/t/5b349487562fa750e010ad3a/1530172554717/Hipgnosis+Songs+Fund+Limited+-+Prospectus.pdf https://static1.squarespace.com/static/5937f2f1bebafb1297678...
- wtn 7y ago
  That would be a royalty trust.
Scown 7y ago
Think the killer point is making "synch managers" responsible for far fewer songs than traditional publishers. They're effectively treating each song as an artist with its own manager, so naturally that manager is gonna be much better able to see how and where to place "their" songs.

nickthemagicman 7y ago

That's optimistic of you to think that he's going to give more profits to the artist.

cpach 7y ago
Nitpick: To the songwriters.
zaroth 7y ago
If he’s paying 20x multiples versus 10x multiples than that is exactly what is happening. His investors take all the risk on trying to make a return on that investment, the songwriter gets paid double up front.

mrnobody_67 7y ago

His big bet is that the assets are undervalued... Could end up exiting through the launch of a Music Royalties REIT. Liquid assets that trade always get a premium over illiquid limited partnerships. Could be an interesting asset class for diversification that's relatively uncorrelated... Anyway, full investment prospectus for his fund is here: https://static1.squarespace.com/static/5937f2f1bebafb1297678ff8/t/5b349487562fa750e010ad3a/1530172554717/Hipgnosis+Songs+Fund+Limited+-+Prospectus.pdf https://static1.squarespace.com/static/5937f2f1bebafb1297678...

wtn 7y ago
That would be a royalty trust.

Scown 7y ago

Think the killer point is making "synch managers" responsible for far fewer songs than traditional publishers. They're effectively treating each song as an artist with its own manager, so naturally that manager is gonna be much better able to see how and where to place "their" songs.