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The Hipgnosis Songs Fund now has a catalog of 65,413 songs… with a combined value of $2.55 billion

Hipgnosis Songs Fund (HSF), the UK-listed entity founded by Merck Mercuriadis, now holds a catalog of music rights worth over $2.5 billion.

That’s according to an independent assessment revealed in Hipgnosis’ new interim financial report, covering the six months to the end of September 2021.

The report reveals: “As of September 30, 2021, [our] The portfolio comprises 146 catalogs, 65,413 songs, with an aggregate fair value of $2.55 billion (as determined by the independent portfolio appraiser).

The valuation of this catalog continues to increase, just as the multiples paid in the music industry for the rights continue to increase.

According to the HSF report, its latest independent valuation placed an aggregate multiple of 19.03 times the historical annual net income of publishers’ shares on the company’s rights portfolio. (i.e., the appraiser estimates that the current music M&A market would pay a multiple of 19 times for the rights to HSF if they were hypothetically offered for sale.)

This multiple of 19.03 times, according to the interim report, is significantly higher than the blended acquisition multiple of 15.93 times the net income that HSF paid, on average, for the rights it holds today.

Indeed, at the end of March 2021, the catalog of the Hipgnosis Songs Funds – then of 64,555 songs – was valued at 2.2 billion dollars.

That $2.2 billion figure was based on a multiple of 17.96 times historical annual net revenue from publishers.

Since then (i.e. within six months from the end of March to the end of September 2021), HSF has acquired the rights to 858 songs.

This is being done through eight separate acquisitions, at a total cost of US$260 million.

The company used that money to secure the rights to songs by the Red Hot Chili Peppers, Christine McVie of Fleetwood Mac, Rhett Akins, The Monsters & Strangerz (Stefan and Jordan Johnson), Elliot Lurie, Ann Wilson and Kaiser Chiefs.

Hipgnosis says HSF’s catalog value increased 3% on a like-for-like basis in the six-month period ending September 2021, which it says was due to: “An increase in expected performance revenue in 2023 while [our] Independent Portfolio Valuer now forecasts a stronger rebound from COVID-19 to pre-pandemic levels,” as well as “an increase in streaming growth rates to reflect continued growth in paid subscribers beyond expectations.”

Hipgnosis Songs Fund has also revealed some key earnings data in its new interim report.

In the six months ending September 2021, the company generated net revenue of $74.1 million, up 31% year-over-year.

HSF pinned this revenue growth primarily on the catalog acquisitions it made in the previous 12 months.

Of that $74.1 million, some $26.9 million (36%) came from streaming platforms, while $19.8 million (27%) came from performance royalties and $11.6 million (16%) came from synchronization licenses. (See below for a full breakdown.)

As a result, HSF’s current rights portfolio now looks firmly on track to post around $150 million a year.



Other key figures for the Hipgnosis Songs Fund over the half-year period (until end of September 2021) include:

  • EBITDA for the six months ended September 30, 2021 up 16.2% to $54.6 million (six months ended September 30, 2020: $47.0 million);
  • Operating NAV (net asset valuation) up 2.5% to $1.7242 per share over the six-month period (March 31, 2021: $1.6829);
  • An operating loss of $18.0 million, mainly due to expenses related to the amortization of catalogs (-$52.1 million) and related to interest repayments on loans (-10.0 million dollars)


Merck Mercuriadis, Founder of Hipgnosis Songs Fund Limited and Hipgnosis Song Management Limited said, “It’s amazing to believe that we are halfway through our fourth year! The past nine months, including this interim reporting period from April 1 to September 30, 2021, have been a very important and exciting time in our maturation.

“I am delighted to report net revenue growth of 31% year-on-year, EBITDA growth of 16% and most importantly, NAV growth of 2.5% over the past six months. months, thanks to an increase in the fair value of our catalogs. This brings our total net asset value return delivered since IPO less than 4 years ago to an incredible 46.7%.”

Mercuriadis added, “While we’re in an incredibly strong position with our catalog of iconic songs, this has been a challenging time. As we’ve previously indicated, the lag between song consumption and royalty statement processing, which is when we recognize revenue, means that the impact of COVID-19 is now fully felt in these results.In particular, and with the music industry at large, the closure of concert halls, pubs , bars and restaurants during various lockdowns impacted comparable performance revenue from our catalogs during this period.

“As we look to the future, despite the emergence of the Omicron variant of COVID-19, we continue to see promising prospects for the music industry and our catalogs.”

Merck Mercuriadis

“Our vintage catalogs made up for a drop in their performance revenue with exceptional streaming performance revenue as consumers turned to classics during lockdown. Although we are in one of the most difficult economic and operational times of our lives, we are delighted to have always been able to provide a fully covered dividend – a validation of the reliability of songs as a class of assets. As we look to the future, despite the emergence of the Omicron variant of COVID-19, we continue to see promising prospects for the music industry and our catalogs.

“Over the past 6 months we have seen concert venues fully booked through 2023, pubs, bars and restaurants full and streaming growth continuing to exceed expectations. This growth optimism is shared by our independent valuator who increased the future earnings trajectory of our catalogs in their valuation models, resulting in a 3% growth in the fair value of our catalogs, however, we must be proactive and not hold this recovery for granted, which is highlighted by the continuing uncertainty caused by the Omicron variant of COVID-19.

“Therefore, in order to ensure that our catalogs perform better regardless of market conditions, we continue to increase our song management efforts. We have hired experts in all areas of song management as we explore every opportunity to innovate and maximize revenue from our songs.Our focused and conscientious model provides the bandwidth to manage great songs responsibly as we maximize their revenue while enhancing their long-term legacy.


After raising $215 million in June/July this year through an equity placement, Hipgnosis Songs Fund promised its investors not to raise any more capital on the public markets until at least the second quarter of 2022.

Since then, Merck Mercuriadis has announced a new $1 billion private equity round from Blackstone.

This money will fund a New Hipgnosis Affiliate Fund – Hipgnosis Songs Capital – managed separately from the Hipgnosis Songs Fund.

Additionally, Blackstone has invested in Mercuriadis’ investment management company, Hipgnosis Song Management.

When Hipgnosis Songs Fund is able to raise more funds next year, Mercuriadis says, it will be able – so long as it has the money – to get a 20% stake in all rights acquired by Hipgnosis Songs Capital.The music industry around the world