Blackstone, Hipgnosis Put $$ Where Music Is
• Blackstone, the world’s largest alternative asset manager, and Hipgnosis Song Management Ltd. (HSM) announced a new partnership, backed by funds managed by Blackstone, which will initially deliver $1 billion to acquire music rights and manage catalogues. Hipgnosis Song Management Ltd. is one of the industry’s leading advisory firms focused on music assets and is investment advisor to Hipgnosis Songs Fund Ltd. (SONG), the largest UK-listed investor in music catalogues and royalties with gross assets of $2.2 billion.
Merck Mercuriadis, Founder & CEO of Hipgnosis Song Management, said, “Hipgnosis Song Management has firmly established songs as an asset class. This new partnership with Blackstone will deliver financial strength to invest in proven songs as well as grow our song management team and bring additional sophistication to HSM, enabling us to create greater value to our stakeholders including our songwriters and shareholders in SONG. Given the strength of our pipeline, we see the initial commitment as just the start of a long-term partnership between Blackstone and Hipgnosis that will also include co-investment with SONG.”
Qasim Abbas, Sr. Managing Director, Blackstone Tactical Opportunities, commented, “This partnership underscores the long term, sustainable value we see in creative content across the wider entertainment industry, building on Merck’s vision and dynamism. The music industry has been at the forefront of the fast-growing streaming economy and is unlocking new ways of consuming content. We look forward to working with Merck and his team to continue their exciting journey and safeguard the legacy of the songwriters that entrust us with their content.”
As part of the partnership, Blackstone will take an ownership stake in HSM and will support the expansion of its infrastructure and business functions, including the development of new song management expertise, data science capabilities and technology solutions. This should allow HSM to further enhance the value of the rights it purchases, working in close collaboration with songwriters, artists and producers. SONG is expected to benefit from Blackstone’s investment in HSM’s management capabilities and will have the right to co-invest in future catalogue acquisitions alongside the new Blackstone-HSM partnership.
Blackstone was advised on the transaction by Goldman Sachs, FTI, Kirkland & Ellis and Deloitte. HSM was advised by RBC, Capstan Capital Partners and Stephenson Harwood.
