Thoughts on Hipgnosis Songs Fund?

[Jerry1911]

Let me hear your thoughts on Hipgnosis songs fund! They invest in songs, music copyright/royalties.

"Hipgnosis Songs Fund is the first UK investment company offering investors a pure-play exposure to Songs and associated musical intellectual property rights. Our focus is building a diversified Portfolio, acquiring Catalogues that are built around proven hit Songs of cultural importance by some of the most talented and important Songwriters globally."

https://www.hipgnosissongs.com/
https://finance.yahoo.com/quote/SONG.L/community?p=SONG.L

 

[Jerry1911]

Bump....

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[JohnnyDoe]

The idea is good, but then like with any fund you don’t know how much of your investment goes for paying staff and in room service…

 

[Jerry1911]

The idea is good, but then like with any fund you don’t know how much of your investment goes for paying staff and in room service…

Right. But the current yield is 4.60% which is pretty good (I think ... is it?) and they seem to be agressively reinvesting into more song rights (aka future royalties).

P.S. I found this, not sure if this is what you're referring to. Page 108 in link below.

https://www.digitalmusicnews.com/wp-content/uploads/2021/07/hipgnosis-financial-2021-iss-jul-4.pdf

 

[JohnnyDoe]

Right. But the current yield is 4.60% which is pretty good (I think ... is it?) and they seem to be agressively reinvesting into more song rights (aka future royalties).

Royalties should yield more than that in my view

P.S. I found this, not sure if this is what you're referring to. Page 108 in link below.

View attachment 3856

https://www.digitalmusicnews.com/wp-content/uploads/2021/07/hipgnosis-financial-2021-iss-jul-4.pdf

These figures are fine, I was referring to all the undisclosed expenses and other ways to syphon out money that you can’t see from FS. I wouldn’t care if they made a 8%, 4.6% is too low.
It would also be nice to know how much skin in the game the directors have.

 

[lostguy]

I would not do it, but I have also no clue about this type of investment!

 

[Silvio]

It's an interesting fund but it went down quite a bit when Neil Young asked Spotify to choose between him and Joe Rogan (and they chose to delist Neil Young's music):
https://www.proactiveinvestors.co.u...-the-neil-young-spotify-crossfire-972783.html
This brings questions to what exact assets do they even own and what rights do they have, if the artist can just unilaterally harm their cashflow like that.

Overall maybe a good fund but there are safer way to get 4.60% on your money.

 

[Golden Fleece]

There is a company called Royalty Exchange where you can purchase music royalties directly by auction. The past history of royalties provides some idea of the future returns. I have to admit that there are so many types of royalty ownership rights for the same music that it is rather confusing.

https://auctions.royaltyexchange.com/overview/

 

[Jerry1911]

I have to admit that there are so many types of royalty ownership rights for the same music that it is rather confusing.

I agree, it's very complicated. In my opinion it's a very interesting new asset class; these kind of deals were usually done behind closed doors up until recently.

Regarding Royalty Exchange, keep in mind people like Merck Mercuriadis (Hipgnosis manager) usually have connections in the industry and can get better deals than some of us would on a platform like that.

There is also Opulous, a crypto project which aims to create a decentralised market for music rights. And Audius as well.

 

[Jerry1911]

https://variety.com/2022/music/news...h-worldwide-youtube-spotify-apple-1235156594/
https://www.musicbusinessworldwide....proved-15-1-streaming-royalty-rate-in-the-us/
Title says composers but it's related to neighbouring rights as well therefore this should have effect on Hipgnosis too.

 

[sergeylim88]

Overall maybe a good fund but there are safer way to get 4.60% on your money.

What would be safer way to get 4.6%?

 

[Golden Fleece]

What would be safer way to get 4.6%?

You can buy U.S. I Bonds right now for 9.62%, but the maximum investment is $10k. You must hold them for at least one year.

I bonds, however, are currently paying out an interest rate of 9.62 percent (confirmed through October 2022), the highest yield since being introduced in 1998. The reason the rate is so high is because I bonds are inflation protected, and inflation was 8.6 percent in May 2022.

https://money.howstuffworks.com/personal-finance/budgeting/treasury-bonds-treasury-notes-news.htm
U.S. I Bond web site:

https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm______________

You can find various safe bridge loans secured by the underlying assets for 10% to 15%.

 

[sergeylim88]

where would i find a list of safe bridge loans secured by the underlying assets for 10% to 15%?
what are risks involved with these?
would these be safer or riskier than s&p500?

 

[Golden Fleece]

where would i find a list of safe bridge loans secured by the underlying assets for 10% to 15%?
what are risks involved with these?

There is no list. You must do some research and track them down. Get on email lists, etc. The risk can range from very safe to very high risk, which is why I emphasized secured by the underlying assets, which are the only ones that I have done. Obviously, those are far safer. The track record and the financial health of the companies involved are of paramount importance.

would these be safer or riskier than s&p500?

Well, it depends on your view of the S&P 500. Most investors consider investments in the S&P 500 as very safe. Personally, I do not.


Here is one that you can read about. It has been in place since about 2017. It is my understanding that all the early investors have received their promised returns and that many have re-invested.
https://www.overseaspropertyalert.com/real-estate-investment-panama-profits-community-support/

 

[Jerry1911]

https://www.musicbusinessworldwide....-end-of-march-it-still-grew-in-value-by-140m/
"Mercuriadis adds that this streaming growth “outperformed our Independent Valuer’s expectations, and together with the first time recognition of the value of revenue generated from the now established digital lifestyle platforms that have emerged, led to an annual increase in our Operative NAV of 9.9%”.

One key factor in the growth of Hipgnosis Songs Fund’s value: The firm’s annual report says that it saw a “20% increase of formal synch licences approved in the 6 months to [March 31, 2022] versus the first half of the financial year”."