Director,
Our client
Hipgnosis brought a new asset class to the LSE, offering investors a pure-play exposure to songs and associated musical intellectual property (IP) rights. Both Hipgnosis and its investment adviser,
Scenario
Merck's vision is to create a Ł2 billion fund that invests in the best music catalogues whilst recognising the contribution of songwriters and promoting their interests in the economic equation. This would provide the investment community with access to a new asset class that, through the expert management of the songs acquired would deliver strong and growing returns for shareholders.
As a newly formed investment adviser, TFM not only required an experienced fund administrator that could provide a highly personalised service and support it through the fund's initial stages, but it also needed an administrator with requisite scale to service the fund throughout its ambitious growth journey.
A success story
Hipgnosis has been a real success story, raising over Ł1.05 billion (gross equity capital) in total through its IPO in
This level of success led Hipgnosis to transfer the entirety of its issued share capital from the Specialist Fund Segment to the Premium segment of the Main Market in
In
Secondly, Hipgnosis also acquired a portfolio of 42 catalogues from the investment fund, Kobalt Music Copyrights S.ŕ r.l. for
Hipgnosis now owns 117 music catalogues comprising in excess of 57,000 songs, some of which TFM believe to be the most culturally important and commercially successful songs of all-time. These include: Journey - Don't Stop Believin'; The Pretenders - Don't Get Me Wrong; Eurythmics - Sweet Dreams (Are Made Of This); Chic - Le Freak; Bon Jovi - Livin' On A Prayer;
The entire portfolio has an aggregate acquisition value of Ł1.18 billion, representing a blended acquisition multiple of 14.76x historic annual income, net of right to income.
Our approach
Hipgnosis chose to appoint
We perform all the day-to-day administration, accounting, corporate secretarial, governance and regulatory services, ensuring the effective functioning of the fund and subsidiary companies in compliance with all applicable regulations and best practices.
We are very proud to be a part of the Hipgnosis family and are delighted to be supporting the fund throughout its incredible growth journey, adapting and tailoring our services as the fund has scaled up to match investor demand.
Commenting on our role as fund administrator, Hipgnosis founder, Merck Mercuriadis said: "The systemic change in the way people consume great songs via streaming has created a four year or so window to acquire these predictable and reliable uncorrelated assets with 3 x NAV growth as the target. Taking full advantage of this opportunity requires moving at a blistering pace and
Supporting success
Fund administration is a highly specialised service that requires precision and expertise if investment managers are to focus their efforts on the formulation and implementation of strategy without distractions. At
Originally Published By Ocorian,
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Ms
11 Old Jewry
EC2R 8DU
E-mail: samuel.asquith@ocorian.com
URL: www.ocorian.com/
© Mondaq Ltd, 2020 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com, source