Sweet fund of mine
A GUERNSEY fund founded by the former manager of Guns N’ Roses and Beyoncé to invest in music back catalogues has raised £202.2m. – with Rihanna’s ‘Umbrella’ included in its first investment.
Hipgnosis Songs Fund Limited, set up by Merck Mercuriadis, raised the money through an initial public offering and was admitted to the London Stock Exchange on 11th July.
Investors have been attracted by the industry calibre of Mr Mercuriadis, who has also managed Elton John, Morrissey and Iron Maiden. Royalties accrued on songs held by the fund will produce yields for investors, with the value of such musical intellectual property rights predicted to rise.
Three leading Guernsey advisors also collaborated in the IPO of Hipgnosis Songs on the specialist fund segment of the LSE.
Fund administrator Estera International Fund Managers (Guernsey) Limited, law firm Ogier and PwC worked closely with investment adviser The Family (Music) Limited on the launch of the first London-listed vehicle to offer an attractive and growing level of income and capital growth investing in music. TFM, founded by Mr Mercuriadis, counts in its advisory board music industry veterans as well as luminary Nile Rodgers.
Hipgnosis Songs has also announced its first investment in a catalogue of 302 songs that includes hits such as ‘Umbrella’ performed by Rihanna as well as Beyoncé’s ‘Single Ladies (Put a Ring On It). The fund is acquiring a 75% interest in the catalogue of Terius Youngdell Nash, better known by his stage name The-Dream for $23.75m. funded from its cash resources. The-Dream will retain the remaining 25% of the catalogue.
‘It's critical for us to set the highest standards with our first acquisition,’ said Mr Mercuriadis. ‘It's an honour for this to not only be our first order of business but also to welcome Dream to our advisory board. He is a catalyst on so many levels and a big part of our future.’
Locally, the Estera team working on the IPO was led by directors Mariana Enevoldsen and James Christie. Ogier acted as Guernsey legal counsel, led by group partner Craig Cordle and associate Charlotte Brown, while the PwC team of reporting accountants included Stephanie Coxon and Jo Mauger.
Ms Enevoldsen said: ‘We have a long track-record in providing administrative services to innovative alternative investment funds. Supported by a highly-credible advisory team which is deeply embedded within the music industry, Hipgnosis Songs answers ongoing investor demand for increasing levels of income and capital growth from assets which are completely uncorrelated to other investments.’
Mr Cordle, partner and head of Guernsey Investment Funds at Ogier, said the firm was delighted to have worked together with TFM, local and international advisors to bring this innovative product to fruition.
‘This is a new asset class for Guernsey and Hipgnosis Songs is a fantastic addition to the strong stable of LSE-listed closed-ended funds already domiciled in Guernsey. New promoters like TFM are exactly what Guernsey needs, and Hipgnosis Songs is a great reflection of how Guernsey can support fundraising internationally,' he added.
Ms Coxon from PwC said: ‘This is another great product for Guernsey. It demonstrates the jurisdiction continues to be popular and trusted by advisors and investors. It's also interesting to see promoters and advisors looking to create products that provide constant yields that are not necessarily correlated to other financial markets.’
N+1 Singer acted as financial adviser and bookrunner and Herbert Smith Freehills as UK legal advisors.