Blackstone has taken a big step in the world of music rights by announcing a deal with music mogul Merck Mercuridis-led company Hypnosis Song Management.
The private equity group will put $ 1 billion into a new fund run by HSM that will buy music rights, catalogs and royalties.
It will also participate in a music publishing company, which manages the London-listed Hypnosis Song Fund separately and rapidly buys songs from artists such as Blondie and Neil Young.
Blackstone’s new funding comes as private equity groups double the value of music, increasing the quality of old songs as a result of streaming.
“This new partnership with Blackstone will invest in proven songs as well as provide financial strength to expand our music management team,” said Mercuriadis, a former manager at ElConton John.
He added that his company has “firmly established songs as an asset class”.
Blackstone declined to say whether it was taking a majority or minority stake in HSM, or whether it was buying it in any valuation.
Rival private equity firm Apollo said last week it was launching a new investment company, Harborview, which paid $ 1 billion to spend on music rights, when KKR merged with BMG, one of the world’s largest music companies, in March to Large acquisitions of labels can be noticed and catalogs.
The Hypnosis Song Fund is the UK’s largest listed investor in music catalogs and royalties with total assets of around ২ 2.2 billion. Under the Blackstone Agreement, it will have the right to co-invest in new funds as well as music catalogs.
Blackstone’s investment in the new car will be equity and debt, and will come from its Strategic Opportunity Fund.
This year, Steffel’s analysts have expressed concern about how Hypnosis evaluates his acquired songs, as very little financial information is provided when it comes to contracts.
Numis added that it is difficult to make a financial assessment of the hypnosis, due to a lack of available information, but the company has responded by increasing the level of information published about its purchase.
Qasim Abbas, senior managing director of Blackstone’s strategic opportunities unit, said the private equity group saw “long-term, sustainable value” in what it called “creative content.”
Shares of the Hypnosis Song Fund have risen 17 percent since being listed in 2018 and 2 percent since the Blackstone announcement.