Amid the flurry of mergers, acquisitions and asset sales that have taken place in the music industry this year, the sale of three scaled music rights catalog companies — Anthem, Iconoclast and Crescendo — is a sign that the catalog investment market is approaching a milestone.
Since 2018, when Hipgnosis Songs Fund listed on the London Stock Exchange and raised £200 million ($260 million) to invest in music intellectual property, the market for music as an “investible asset,” as Hipgnosis founder Merck Mercuriadis described it, has grown by the tens of billions.
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Private equity funds including KKR and Bain have long invested in major music companies, while independent catalog companies like Primary Wave, Round Hill Music and the publisher Reservoir have been acquiring publishing rights and master recordings for decades. However, in the eight years since Hipgnosis’ listing, there has been a boom in catalog investing as more private equity firms, insurance companies, pension funds, sovereign wealth funds, global private credit investors and family offices — to name a few — have been drawn to the annuity-like returns music royalties provide in the streaming era.
As the practice of treating music as an asset class has grown in popularity, it has also evolved, with companies from indie giants like Concord to the four-year-old music rights company Duetti securitizing their music portfolios to raise capital from debt markets. The rating agency KBRA says it has rated more than 80 music asset-backed securities with a cumulative value of $12.9 billion since 2020, and many of those, including Concord, Lyra and Canon, racked up triple the interest that was expected.
