HIPGNOSIS RAISES ANOTHER $100M+

Hipgnosis Songs Fund has raised $103 million (£75m) from the sale of 61.99m new shares, the company announced on Friday (2/5).

Eyeing this huge pile of additional cash earmarked for further acquisitions, Hipgnosis founder Merck Mercuriadis was in an especially voluble mood.

"2020 was a transformational year for Hipgnosis,” Merck’s statement began. “Against one of the most challenging economic backdrops of our lives, we raised more capital than any other listed investment fund, outperformed the FTSE 250 index by 21.5% and paid a fully covered dividend of over five pence per share, which places us as the 35th-highest-dividend-yielding company on the FTSE 250. Whilst we would not have wished for a pandemic to prove our thesis that music is a highly investable asset class generating uncorrelated returns, it has done exactly that. In just over two years from IPO to our latest results announcement of 9/30/20, we have generated a Total NAV Return of 37.9% for our shareholders, a 40.4% outperformance of the FTSE 250 over the same period.

“That momentum continues, and 2021 is off to our strongest start ever, with some of the most important catalog acquisitions we have made to date being announced. The new prospectus underpins our plans for marketing into new audiences and fundraising for the rest of the year, and I’m delighted with the excellent first step we have made with a successful raise of over $100 million.

“Once again, I am incredibly appreciative of the support from both our existing and new shareholders and equally the incredible songwriters who have entrusted us with their iconic songs. We look forward to investing further into our pipeline of proven and culturally important songs and actively managing these incredible songs to enhance their legacy and maximize income as we seek to provide exceptional risk-adjusted returns for shareholders. To top it off, we have both the #1 and #2 airplay songs in the U.K. this week with Miley Cyrus f/Dua Lipa and Justin Bieber, respectively, both written by our songwriter Stefan Johnson.”

NYC-based Morgan Stanley led the investment round, with the remainder of the raise coming from existing Hipgnosis shareholders, MBW reported.

In a prospectus issued on 1/21, the company said it aims to issue up to 1.5 billion shares this year, which at current rates would yield north of $2b.