The fast-growing Hipgnosis Songs Fund’s revenues soared in its first full year of business, climbing to $81 million in the 12 month period ended in March 2020 from around $8.9 million in the preceding period. The firm, which has been on an unprecedented acquisition binge of hit songwriter and producer catalogs — been buying up catalogs by hitmakers ranging from Timbaland and Eurythmics’ Dave Stewart to Jack Antonoff and Jeff Bhasker — began trading on the London Stock Exchange in July of 2018. Between March 2019 and March 2020, the company spent nearly $700 million to acquire 42 catalogs.
In the report, cofounder and CEO Merck Mercuriades notes, “When compared with the three major song companies, we have achieved between 7% and 12.5% of their revenue on between 0.5% and 0.9% of their number of songs.” This is a result of the group’s highly selective investments, which he summarizes in the report thus: “All of our songs have a proven track record and we do not speculate on new songs regardless of the past performance of the songwriter, producer or artist. These proven hit Songs produce reliable, predictable and uncorrelated cash flows which are highly investible.”
On Thursday, the firm notified its investors on the LSE that it is seeking to raise nearly $250 million to acquire more catalogs, according to Music Business Worldwide. It announced in April that it secured a new $188 million revolving credit facility from a syndication of seven banks, including JP Morgan. The company has already invested more than $1 billion in just over two years.
Founded in 2018 by Mercuriades and Chic cofounder Nile Rodgers, Hipgnosis has acquired full or partial stakes in the catalogs of many songwriters who have enjoyed multiple global hits, including The Chainsmokers, The-Dream, Tricky Stewart, Poo Bear, the late Chic co-founder Bernard Edwards, Johnta Austin and Sean Garrett. Its holdings now include more than 6,000 songs worth more than $1.3 billion, it told investors earlier this year, and its recent acquisitions have driven that number even higher.
Over the past few months alone, Hipgnosis has announced the acquisition of catalogs from hit songwriters Mark Ronson (Lady Gaga, Bruno Mars, Amy Winehouse), Jack Antonoff (Taylor Swift, Lana Del Rey, Lorde, St. Vincent), Jeff Bhasker (Kanye West, Bruno Mars, Harry Styles), Savan Kotecha (Ariana Grande, The Weeknd, One Directon), Fraser T. Smith (Adele, Stormzy), Johnny McDaid (Ed Sheeran, Pink), the band Kaiser Chiefs and producer Brendan O’Brien (Bruce Springsteen, Pearl Jam).