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London-based song rights powerhouse Hipgnosis Song Management and investment giant Blackstone unveiled a music investment partnership on Tuesday, with Blackstone committing $1 billion in funds and taking a stake of undisclosed size in Hipgnosis.
Founded in 2018 by Merck Mercuriadis, a former music manager for the likes of Elton John, Beyoncé and Guns N’ Roses, the firm has been buying music catalogs through publicly traded, London-listed Hipgnosis Songs Fund, which has gross assets of around $2.2 billion. It has struck deals for catalogs owning songs that are performed by the likes of Rihanna, Michael Bublé, Shakira, Fleetwood Mac’s Lindsey Buckingham and Neil Young.
Backed by funds managed by Blackstone, which will initially deliver about $1 billion “to acquire music rights and manage catalogues,” the new partnership brings together two big players from their respective fields.
As part of the deal, “Blackstone will take an ownership stake in Hipgnosis Song Management and will support the expansion of its infrastructure and business functions, including the development of new song management expertise, data science capabilities and technology solutions,” the companies said. “This should allow Hipgnosis Song Management to further enhance the value of the rights it purchases, working in close collaboration with songwriters, artists and producers.”
CEO Mercuriadis said that Hipgnosis has “firmly established songs as an asset class,” adding: “This new partnership with Blackstone will deliver financial strength to invest in proven songs as well as grow our song management team and bring additional sophistication to Hipgnosis, enabling us to create greater value to our stakeholders, including our songwriters and shareholders.” He added: “Given the strength of our pipeline, we see the initial commitment as just the start of a long-term partnership between Blackstone and Hipgnosis that will also include co-investment.”
Qasim Abbas, senior managing director at Blackstone Tactical Opportunities, said: “This partnership underscores the long-term, sustainable value we see in creative content across the wider entertainment industry, building on Merck’s vision and dynamism. The music industry has been at the forefront of the fast-growing streaming economy and is unlocking new ways of consuming content. We look forward to working with Merck and his team to continue their exciting journey and safeguard the legacy of the songwriters that entrust us with their content.”
Hipgnosis Song Management “is expected to benefit from Blackstone’s investment in Hipgnosis’ management capabilities and will have the right to co-invest in future catalogue acquisitions alongside the new … partnership,” the companies said.
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