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MERCK FLOATS HIPGNOSIS SONGS

Respected manager and former Sanctuary CEO Merck Mercuriadis has proceeded with the plan to float his Hipgnosis Songs Fund on the London Stock Exchange after successfully raising £200m ($264m) from an initial investor pool. Shares will be publicly traded starting 7/11. 

As SONGS, the firm is the first LSE listed pure-play music investment firm and is so far the biggest fund IPO of this year. 

The cash will be used to buy a bank of songs by more than 50 artists from the past five decades. Included are “proven, evergreen songs from award-winning songwriters” and more than 10 U.S. and U.K. #1 hits. We have word that Mercuriadis has lined up £400m worth of deals in the pipeline to choose from. 

Mercuriadis made an initial attempt at fundraising last year under the watch of Cenkos Securities, which have since been replaced by N+1 Singer Advisory LLP as financial adviser. An advisory board is made up of Nile Rodgers (who Mercuriadis still manages), manager Ian Montone, Lava Records Jason Flom and financiers Bjorn Lindvall and William Leibowitz. The company will be administered by Kobalt.

The motivation behind Hipgnosis is tied into Mercuriadis’ belief about the future value of song catalogs, which he hopes will continue to rocket thanks to streaming and the reduction of piracy, growing penetration of smartphones, global sync income and the integration of music tech in other products. He also wants to start a company that will have serious negotiating power to demand better royalty rates for writers as it grows in market value.

“I believe that the song, even more so than the artist, is the most important component in a hit record,” Mercuriadis said. “The music industry has been built on the predictable and reliable income they provide and I’m delighted that the financial community is supporting our thesis that the proven hit songs we are targeting for acquisition are very investable assets.

"I’ve spent the better part of the last 35 years advocating for great artists, songwriters and producers and my ambition is to grow the fund not only to provide great returns for our investors but equally well in due course to create the leverage that only critical mass can provide to change the songwriters position in the economic model.”

 

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