Hipgnosis Songs Fund


Hipgnosis Songs Fund is a British Guernsey-registered music IP investment and song management company founded by Merck Mercuriadis and co-founded by Nile Rodgers in 2018. The only UK investment company focused on songs and associated musical intellectual property rights, it was founded on the premise that hit songs are long-term predictable assets unaffected by economic cycles which will increase in value as the worldwide music streaming market continues to grow. The company acquires proven songs and songwriter catalogs and actively manages them to drive playlist, cover, interpolation, and synchronization revenues.
Hipgnosis Songs Fund has raised nearly £862 million to fund acquisitions since it was established in 2018. In June 2019, at the close of its first full year as a publicly traded company, its catalogue totalled more than 5,000 songs; of those, approximately 2,000 had been #1 hits somewhere in the world, and 4,000 had reached the Top 10. Five songs co-owned by Hipgnosis Songs Fund appeared in the Top 10 on the Billboard Hot 100 of the decade chart. In April 2020, it was reported that Hipgnosis had bought or partially bought 12,000 songs, and spent a billion dollars across approximately 60 deals. As of July 2020, Hipgnosis had acquired 54 catalogs, building a music rights portfolio which was independently valued at £757 million.
Hipgnosis Songs Fund was listed on the main market of the London Stock Exchange in July 2018 and transferred to the premium segment of the main market in November 2019. It has been a constituent of the FTSE 250 Index since March 2020.

History

Hipgnosis Songs Fund was founded by Merck Mercuriadis, who has managed artists including Elton John, Iron Maiden, Morrissey, Beyoncé, and Nile Rodgers. Mercuriadis said in a February 2019 interview: "Nile and I, one day, just started riffing off of these ideas of how do we change this system, how do change what’s going on today where the songwriter – who provides the most important component in an artist having success –  is the lowest person on the totem pole?" Mercuriadis believed that a rights and song management company with substantial assets would have the leverage to change the existing economics of publishing for songwriters, and in 2018, with a strategy to build capital by offering investors pure-play exposure to songs and associated musical intellectual property rights in place, Hipgnosis Songs Fund was formally founded. The company was named after Hipgnosis, the art and design group founded by Storm Thorgerson and Aubrey Powell.
Hipgnosis Songs Fund went public in July, 2018; an earlier plan to float the company in the UK had been postponed to conduct further due diligence. Its prospectus noted a "unique market opportunity as technology disruption is changing the way music is consumed." At its July 10, 2018 launch on the British Stock Exchange, Hipgnosis Songs Fund raised £202m, well over its goal. Trading as SONG, it was one of two investment trust IPOs that were oversubscribed that year. Following the listing, the company reported that it had acquired a 75 percent interest in its first music rights catalog from musician The-Dream for £18.83 million. Among other hits, the 302-song collection included Justin Bieber's "Baby", Rihanna's "Umbrella" and Beyonce's "Single Ladies ”.
By the end of 2018—advised by The Family Limited, an advisory board that includes Mercuriadis, Rodgers, Starrah, The-Dream, David A. Stewart, Nick Jarjour, Bill Leibowitz, Ian Montone, and Jason Flom—Hipgnosis had acquired the Poo Bear catalogue of 214 songs, including Justin Bieber's "What Do You Mean?" and the English language version of "Despacito"; a 37.5% stake in Chic co-founder Bernard Edwards' catalogue, which comprised 290 songs including "Everybody Dance", "Le Freak," "I Want Your Love" and "Good Times"; the 121-song catalogue of TMS, including "Don't Be So Hard On Yourself" for Jess Glynne, and "Wings" and "DNA" for Little Mix; and the 121-song catalogue of Tricky Stewart, who co-wrote many of The-Dream's hit songs, including "Me Against the Music", and Mariah Carey's "Touch My Body." Prior to a second raise of £146.5 million in April 2019, Hipgnosis acquired the 182-song catalogue of Giorgio Tuinfort, including more than 15 UK Top 10 singles with David Guetta; Itaal Shur, the 249-song catalogue of Johnta Austin, ; 588 songs by Sean Garrett, including "Yeah", Ciara's "Goodies, and "Check on It by Beyoncé; and the 245 song catalogue of Rico Love, including ""Without You" by David Guetta. In October 2019, the company acquired Timbaland's catalogue, which included all six albums by Missy Elliot, and the five Justin Timberlake albums that Timbaland produced. The catalogue comprises 108 albums and songs with collective sales in excess of 32 million. Five songs co-owned by Hipgnosis appeared in the Top 10 on Billboard's Hot 100 of the decade chart.. In December 2019, Hipgnosis added the first four studio albums by Kaiser Chiefs, and the songwriting catalogue of Jack Antonoff to its repertoire.
Hipgnosis raised £49.9 million in August 2019, and an additional £233.7 million in October, bringing its "acquisition warchest" to nearly £650 million. As of October 2019, Hipgnosis Songs Fund holdings included more than 6000 songs, with hits from every decade since the 1950s, valued at £1.2 billion. In November 2019 the company was admitted to the London Stock Exchange Premium Segment of the Official List on the completion of four equity fundraises since its' launch in June 2018.
In January 2020, blink-182 guitarist Tom DeLonge sold his publishing rights to Hipgnosis. In April 2020 the company acquired 70% of Mark Ronson's catalogue. As of July 2020, the Hipgnosis catalogue included 13,291 songs.
On July 2, 2020, to fund new investments to build a "pipeline of catalogs with an acquisition value of over £1bn," Hipgnosis announced that it sought to raise an additional £200 million through adding a tranche of new class C shares. On July 7, following the release of its FY2020 annual report -- which disclosed that Hipgnosis had generated £65.661 million in revenue during its 2020 fiscal year -- the company's share price hit an all-time high, resulting in a valuation of nearly £1 billion.
Hipgnosis exceeded its July 2020 fundraising goal of £200 million after its new share placing was oversubscribed. The company raised £236.4 million, its largest equity raise, bringing Hipgnosis' total raise to more than £862 million.

Portfolio

The portfolio includes: