Investment trust insider on Hipgnosis

Investment Trust Insider on Perpetual Income and Growth

Investment trust insider on Hipgnosis – James Carthew: Hipgnosis Songs sounds well in tune

The brokers are back from holiday and rattling their collection tins again. Hipgnosis Songs Fund (SONG) has launched a £300 million C-share issue. SONG says it has a £1 billion pipeline of potential acquisitions and can deploy the proceeds quickly. The ambition is that the company’s assets will growt to billions in time.

I promised to cover SONG a long time ago, but have been waiting for a chance to meet the management which finally came on 10 September. I have to say I was sceptical, especially so when the company kept coming back for more money before analysts had a chance to pore over it properly. However, I came away from the meeting reassured, maybe even enthusiastic about its prospects.

The backdrop to SONG’s launch was one of disillusioned artists, low valuations on catalogues and a publishing industry that had cut costs to the bone and had ceased to be proactive. The cause of this was a revolution in the way that music is consumed.

I can remember buying my first single in 1981, the first of what would be an extensive collection of vinyl and later CDs. When iTunes came along, I uploaded much of what I had and bought a lot more. Somehow it was always important to own the music I liked. However today, all the music I listen to is streamed and I haven’t bought anything for years.

For artists living off their royalties, the advent of streaming was a worrying time, especially as much of it was streamed on illegal sites. Revenue from music catalogues plunged. Fortunately, Spotify and competing sites such as Apple Music and Tencent Music have stemmed the decline by offering consumers ‘all you can eat’ deals at affordable prices, while the industry has aggressively pursued pirates.

SONG’s investment adviser is Hipgnosis Songs Limited, a business set up by Merck Mercuriadis, who has been involved in the management of artists as diverse as Guns N’ Roses, Morrissey and Beyoncé.

Mercuriadis is a… read more here