The value of Hipgnosis Songs Fund, the publicly-traded music right acquisition company listed in London, hit an all-time high today (November 15).
The company’s share price climbed 0.31% today – versus trading close on Friday last week (November 12) – to reach 128.40 pence on the London Stock Exchange.
That share price represented a rise of 4.39% from the start of calendar 2021, and an increase of 9.74% versus this time a year ago.
Since the point that Hipgnosis Songs Fund first floated on the LSE back in July 2018, the company’s public value has increased by nearly a quarter (+22.87%).
Hipgnosis Songs Fund has, like others in the music industry, seen something of a ‘Universal bump’ since Universal Music Group floated on the Amsterdam Euronext on September 21.
Since that date to now, Hipgnosis has seen a 4.9% share price rise.
UPDATE: MBW has confirmed with Hipgnosis that its current market cap is GBP £1.6 billion, which at current exchange rates works out to USD $2.1 billion.
However, the biggest spike in Hipgnosis’ share price during this period was actually driven by the news that Hipgnosis founder, Merck Mercuriadis, had inked a deal with Blackstone – with the latter firm committing at least $1 billion to a new private fund that will acquire music copyrights.
This move means that there will now be two Hipgnosis-branded funds operating in the marketplace: the publicly-traded Hipgnosis Songs Fund, and the Blackstone backed Hipgnosis Songs Capital.
The copyrights acquired by both of these funds will each be managed by the Mercuriadis-led Hipgnosis Song Management, formerly The Family Music Ltd.
Blackstone has additionally invested funding into Hipgnosis Song Management to help Mercuriadis increase the global bandwidth of that company, which focuses much of its resources on maximizing returns for songs via synch licensing and digital marketing.
Hipgnosis Songs Fund has to date spent around $2 billion on acquiring music rights.
The public fund now has the option to co-invest with the private Hipgnosis fund on acquiring further music rights.
Andrew Sutch, Chairman of Hipgnosis Songs Fund, said when the Blackstone investment was announced last month: “This new partnership will provide new co-investment opportunities for [Hipgnosis Songs Fund], and we expect that continued investment in Hipgnosis Song Management will enhance returns for our investors.”
Mercuriadis suggested at the time that Blackstone’s investment into Hipgnosis Song Management would “[enable] us to create greater value to our stakeholders including our songwriters and shareholders in Hipgnosis Songs Fund”.
MBW understands that Hipgnosis Song Management can never actually lose its management contract of the rights acquired via the Blackstone fund, even if long into the future Blackstone sells some or all of these rights to another party.
Likewise, sources tell us that HSM has first refusal to acquire any rights that the public fund – Hipgnosis Songs Fund – decides to dispose of in the years ahead.Music Business Worldwide