Share Name Share Symbol Market Type Share ISIN Share Description
Hipgnosis Songs Fund Limited LSE:SONG London Ordinary Share GG00BFYT9H72 ORD NPV
  Price Change % Change Share Price Shares Traded Last Trade
  -0.60 -0.49% 121.40 533,924 12:58:40
Bid Price Offer Price High Price Low Price Open Price
121.40 121.60 121.80 121.00 121.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 8.01 2.36 1.17 103.8 1,303
Last Trade Time Trade Type Trade Size Trade Price Currency
13:04:41 O 1 121.60 GBX

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12/4/202102:11Hipgnosis Songs Fund Limited356

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Hipgnosis Songs Daily Update: Hipgnosis Songs Fund Limited is listed in the Equity Investment Instruments sector of the London Stock Exchange with ticker SONG. The last closing price for Hipgnosis Songs was 122p.
Hipgnosis Songs Fund Limited has a 4 week average price of 117p and a 12 week average price of 114p.
The 1 year high share price is 126p while the 1 year low share price is currently 98p.
There are currently 1,073,440,268 shares in issue and the average daily traded volume is 1,981,155 shares. The market capitalisation of Hipgnosis Songs Fund Limited is £1,303,156,485.35.
grahamg8: Melody, SONG say the income streams are stable and I am happy to believe them (and you) on this. The point I was making was that PFAR is not a measure of past performance and can easily be misunderstood. While I was typing my post #348 bump3r seems to have done just that. I am in SONG for income with a reasonable chance of share price growth. Cautious and non aligned, better than cash savings. One of the indicators when I am looking at an investment for income is the financial performance versus the dividends. With a fast changing company it is quite difficult to see any underlying trend. It would be very easy to hit on PFAR and think that the past income was higher than it was in reality and thus think there was more cover for the dividends than truly existed. So PFAR is a reasonable indicator of future performance, but not a record of the past. I take your point that good marketing will allow an outperformance, that's what we all hope management is going to achieve.
melody9999: Thought that was quite a heavyweight performance by the SONG team tonight. Seems to me that Merck is not only building catalogues of the best songs, he is also building a talented management team around him. Its been a great period for acquisitions of course wirh artists unable to present live and being more receptive to offers from industry experts such as Merck. At the same time the audience is stuck at home meaning that streaming etc is increasing. Interesting that, at least initially, this is not a music business but a cash collection business. They have to ensure that all the payments streams are recognised and accessed as well as proactively marketing and developing different revenue streams. gg8 - I think your comments about PFAR are a bit unfair. I take your points, but it seems to me that the revenue models are well developed and very stable over years - so PFAR is a valid measure for new acquisitions. Upside will result from SONG marketing efforts and partnerships so initial PFAR should be conservative. If you don't believe that, then I guess you do not believe that SONG will add value, so you should not be invested.
grahamg8: PFAR is a useful tool but can easily be misinterpreted. The measurement date, in this case 31 December, includes all the song rights owned at that date. The underlying revenue is from two years earlier, calendar 2019, when many of the current song rights would not have been owned. So income is included that SONG did not earn, but could look forward to earning in the future subject to adjustments for increasing/decreasing popularity of each song and resulting income. This is very different from most company predictive data which uses their own historic earnings and adjusts for known or expected changes. The usual warning - past performance is not a predictor of future performance - needs to be replaced with - PFAR is not a measure of past performance of SONG and is not a measure of future performance either. Even so it is an attempt to give some sort of steer on what might be expected in the future, but is in unadjusted form. So you need to do those all important adjustments yourself. DYOR
hectorscrackhouse: from Bloomberg today htTps:// Meet the Man Spending Billions on Rock Music Royalty Merck Mercuriadis of Hipgnosis is buying up songs from artists like Neil Young, Fleetwood Mac and Shakira. Here, he talks about his approach. Not a week seems to go by without some musician selling their songwriting catalog for big bucks. Although a handful of companies are buying them up, the driving force behind this trend is Merck Mercuriadis. After decades overseeing the management of artists like Elton John and Beyonce, he founded Hipgnosis Songs Fund in 2018 to capitalize on the surge in streaming and turn music into an asset class with predictable returns. I talked to him about the business model, investor skepticism and his dream acquisitions. Our conversation has been condensed and edited for clarity. Alex Webb: I would like to hear about the genesis of Hipgnosis. Where did you get the idea that you could turn music into an asset class? Merck Mercuriadis: It started with a perspective that the songwriter was not being paid properly. The disparity that exists between what the record company gets for recorded music and what the publishing company gets for the song is huge. The reason why it exists is that the three biggest song companies in the world — Universal, Warner and Sony — are owned by the three biggest recorded music companies in the world — Universal, Warner and Sony — and they don’t advocate for songwriters. They use their leverage to push the economics in our industry toward recorded music, where they’re getting a lion’s share. So I created the fund with the additional motive of changing where the songwriter sits in the economic equation. AW: If you’re buying the catalogue, the songwriters get that money up front — but aren’t they then cut out of the subsequent value creation? If they no longer own the publishing rights of their songs? More from The Wrong Way to Impeach Trump Elon Musk’s Twitter Retreat Really Says It All Trump Didn't Actually Accomplish Much on Immigration Zero M&A Experience, Mr. Osborne? You’re Hired MM: They still have contingent bonuses on growth. Those would be 10% of the overall deal, and one would be paid at the end of year three and the end of year four. AW: What’s the pitch to investors? MM: The core thesis is that this is predictable, reliable income. The context is the growth of streaming, and that streaming has made it more convenient for people to consume music legally again. We had 16 years of technological disruption with illegal downloading that meant that people like you or I could consume music for free. Only one good thing came out of it, which was that it left these songs at attractive prices. AW: How much money have you raised since you started in 2018, and how much have you spent so far? MM: We’ve raised about 1.1 billion pounds and we’ve spent something short of 1.5 billion pounds, because we’ve got 30% leverage on our fund as well. AW: Broadly speaking, how much revenue comes from streaming the songs you own, and how much from radio play, TV licensing and other forms of licensing? MM: About 50% comes from digital, which includes streaming, and of the other 50%, 25% comes from other types of licensing and 25% comes from sync, which is taking music and marrying it to a moving picture. With streaming and licensing, those are fixed royalties that you’re being paid, whereas on sync it’s something that you negotiate the price of with each use. The margin is much more massive on sync. AW: Do you project streaming will become a bigger percentage of overall revenue? MM: Yes. When we started, there were 30 million paid subscribers to music streaming services worldwide. Today, there are 450 million paid subscribers. And streaming is growing. If you look at the research from Goldman Sachs or Morgan Stanley or JP Morgan, they’re predicting as many as two billion paid subscribers by the end of the decade. AW: How do you identify whose catalogue you need to acquire? MM: There are two criteria important to me. They have to be proven, so there has to be a predictable reliable income stream, and they have to be culturally important. If you want to take advantage of the fact that these assets have 70 years of copyright protection, then it had better be a song that’s going to survive for 70 years. AW: Do you have a systematic approach where you go, “We don't have enough country and western, or we don’t have enough of something else”? MM: Not at all. It’s literally going after the people that have made the greatest music, whether that’s Neil Young, Nile Rodgers and Chic, Dave Stewart and Eurythmics, or Chrissie Hynde and the Pretenders. AW: When you sit down with musicians, what’s your pitch? You don’t just show dollar signs, presumably. MM: I explain to them why I’m buying, and I explain to them why, if I was in their shoes, I might not sell. I want to be very clear with songwriters that I believe these songs are going to triple in value in the next decade. But if they’re at that point in their life where they want to de-risk their future or manage their legacies or their estate planning, I’m the right person to sell to because of my pedigree and because I care about the music. AW: Someone like Jack Antonoff is in his mid-thirties. Why do you think young artists like him are cashing in and selling their song rights? I can understand why Bob Dylan might, for example. He’s not going to get another 75 years of royalties. MM: Dylan probably sold for the same reason Neil Young sold to me. He’s at that stage in his life. For someone like Jack Antonoff, his future is now completely de-risked. He can focus on the projects that he knows and loves. Instead of being in 20 different songwriting rooms, he’s totally focused on Taylor Swift, he’s totally focused on the Bleachers. AW: What generally are the sort of multiples you’re paying artists? MM: The average is 15 times cash flow. There are catalogs we’ve paid a lot more for and some we’ve paid a lot less for. 70% of our transactions are private, off-market transactions between myself, the songwriter, the artist and the producer. If that person has incredible assets and they don’t need money, then you have to be as aggressive as you can possibly be, because what you don’t want is for those assets to become a part of a public option auction. AW: Analysts at Stifel recently downgraded Hipgnosis to neutral, citing skepticism about the way net asset values have been marked up so soon after catalogs were acquired. Can you talk me through why that happens? MM: From Stifel’s perspective, the idea of being able to buy something at a discount is not possible, and of course that’s a ridiculous notion. We have many songwriters, people like Richie Sambora from Bon Jovi or the RZA from the Wu-Tang Clan, who are on record saying that they’ve sold to us for less than they’ve been offered by other people, because they understand that we understand the music and that we’re going to be protective of their legacies while at the same time trying to maximize the opportunities. AW: You reacted pretty strongly to the note, calling them “naïve and obtuse” in an interview with the Daily Telegraph. I’ve heard investors say that such an aggressive reaction actually makes them think twice about investing, because they think maybe you have something to hide. MM: The reason why I took that position with the Daily Telegraph was really simple: Do I want them to write about the Stifel note or do I want them to write about my reaction to the Stifel note? I’d rather they write about my reaction. AW: Why should someone invest in you rather than, say, a real estate investment trust? MM: Because of all the levers that are improving the value of these assets and the revenue of these assets. We’ve got hundreds of millions of people buying into streaming services. And there’s our ability to active manage the songs, because we only have less than 1,000 songs per person. We have more ability to put songs in movies, TV commercials, video games… AW: You mean in terms of songs per employee? How big of a portfolio each person has to manage? Opinion. Data. More Data. Get the most important Bloomberg Opinion pieces in one email. Email Enter your email Bloomberg may send me offers and promotions. Sign Up By submitting my information, I agree to the Privacy Policy and Terms of Service. MM: Precisely. Royal Bank of Canada put out a note last year in July when we announced our fiscal year end for March 31. When Warners IPO’d, it showed that Warner Chappell, Warner’s song company, earned $640 million in the fiscal year. We had earned $85 million in the fiscal year. They did it on 1.4 million songs, we did it on what was then 13,000 songs — so we did 12% percent of the revenue on less than 1% of the assets. Not because we’re smarter or better, but because we’re structured to have the bandwidth to put more into these songs in order to get more out of them. We’re not creating new IP, we’re only focused on managing songs and managing them more effectively. AW: What three artists would you love to have in your catalogue? MM: Dolly Parton, Brian Wilson and of course John and Paul. Actually I won’t even go to John and Paul. Joe Strummer. AW: Are there genres where you don’t feel you have the same depth of expertise? MM: Yeah, look at the opportunities that exist in domestic markets. When you go into those markets, and I’d like to go into many of them, you’ve got to make sure that you’ve got the local expertise. We’re in the middle of doing a deal with Tencent to allow them to be able to interpolate our songs into new IPs specifically for the Chinese market. They obviously control the two biggest DSPs [digital service providers] in China, they have the biggest publishing companies, the biggest record companies, so they’ve got the ability to be able to take our IP and turn it into new hits for the local market. We’ll own half of the IP of the new versions, they’ll own half the IP.
yieldsearch: the FT article (and Stifel) is raising valid potential concerns: 1) Nav. ultimately, what is the value of any asset? at any moment, the price people are willing to pay for it. Why would a third party assessor would value above the price paid? For level 3, it makes all sense to mark it down to the 2nd bid/cover price, if such information is available. never really above the price paid (this is assuming that SONG bought cheap, and the rest of the market is underbidding... coming from a company who never bought such asset, thats a bit rich.) and can we please change the valuation company every other year. obviously conflict of interest if it is always the same company doing the valuation... 2) cash accrual /cash lag: should definitely be a concern for income investor (and really this is not a growth share). and more financial metrics/less verbiage is better for my shares (platinum here platinum there, well, tbh, i really just care about my platinum dividend). This is not a collection of song, it is a financial investment. The team has far better knowledge than me on music and history and number of months on billboards, but they probably need also some dude with financial mind. give me some dividend cover, cash projection, nav sensitivies to dcf tables etc etc
xtrmntr: From investors chronicle DIVERSIFICATIONRichard CurlingHipgnosis Songs Fund (SONG) owns the intellectual property rights and royalty income of songs and music. It has built a portfolio of 117 catalogues and 57,000 songs. This is well diversified across genre and vintage as it is spread over the past five decades. This includes over 2,500 songs that have reached a No.1 chart position, and 16 out of the top 20 most streamed songs of all time.Music is becoming ever more profitable with the rise of streaming services such as Spotify (US:SPOT), which have made it easier to monetise music rights.Hipgnosis Songs Fund's portfolio is conservatively valued using a discount rate of 9 per cent and, as music copyright lasts for 75 years after the death of the artist, these are exceptionally long life assets.The trust's shares yield 4.3 per cent [at the end of October], so you get a good income and excellent opportunities for capital growth.Peter HewittWhen Hipgnosis Songs Fund came to market two years ago, I thought that if it was to be successful the real story would be capital growth. And its latest results [to the end of March] showed capital growth coming through. If you add in the income it produces, it makes quite a tidy return.Music streaming is steadily increasing and Hipgnosis Songs Fund's managers have an ability to get 'synch' deals for individual songs, for example, placing them in an advert, computer game or TV series, which maximises return.Because it is now done digitally, the ability to collect royalties in a timely manner is much improved.Hipgnosis Songs Fund offers prospects for both capital and income growth, neither of which are sensitive to the direction of equity markets.Peter WallsHipgnosis Songs Fund offers exposure to the revenue generated by songs and associated music intellectual property rights. The growth of music streaming accelerated in 2020 with platforms such as Spotify reporting strong growth in subscriptions. The trust's returns are uncorrelated with equity markets and the catalogues of songs have copyright protection of at least 70 years. Hipgnosis Songs Fund also has a yield of more than 4 per cent.
xtrmntr: Hipgnosis Songs Fund (SONG), which invests mainly in music royalties, has unveiled another share placing to raise over £250 million from institutional and private investors as the investment trust continues its rapid expansion. The shares are being issued at 116p - a 7.9 per cent discount to the share price at time of issue. The trust hopes to raise £250m from institutional investors, with a further £4m of shares available via a retail offer. Hipgnosis says it will invest the proceeds in a "significant pipeline of catalogues" which include some of the most influential hit songs of the past six decades.The trust, which launched in 2018 and now has net assets over £700m, is designed to capitalise on the changing way we consume music. The managers pay a lump sum to artists for song rights and aim to maximise revenue potential through streaming rights and by placing the song in films and TV shows. Hipgnosis now owns the rights to nearly 20,000 songs with Barry Manilow and Amy Winehouse among its big names. The fund's pipeline includes exclusivity on approximately 50 catalogues worth roughly £250m, according to the fund's investment adviser, with discussions on further catalogues worth a total of more than £1 billion. Private investors can buy shares through the PrimaryBid platform. At the time of writing, the placing was expected to be open until 11am on 24 September, but could be closed earlier or later at the trust's discretion. PrimaryBid does not charge investors commission, and there is a minimum investment amount of £100. The placing comes shortly after the trust announced it had invested more than 80 per cent of the proceeds from a share issue in July which raised over £230m. Recent acquisitions for the fund include songs from Pretenders lead singer Chrissie Hynde and English songwriter Steve Robson. The trust currently yields 4.17 per cent, according to Winterflood data, and has been popular among investors looking to diversify portfolios away from equities and bonds. Owing to the rise in paid-for music streaming and the longer-term nature of contracts, the revenue stream has proved more resilient than equity dividends over the coronavirus crisis. Ryan Hughes, head of active portfolios at AJ Bell, says "the trust should certainly bring diversification to a portfolio and offer low correlation to equites and bonds." However, he adds that one point that may be an issue for some investors is the lack of transparency around the deals it is doing with artists which makes the trust difficult to accurately value.James Carthew head of investment company research at QuotedData, says "it would be fair to say that there was some scepticism about the concept of the fund when it was launched, especially given that Hipgnosis was shy about saying what they were paying for these catalogues, but, as successive results have demonstrated the success of the fund to date, even shrugging off the fall in income from live music, nerves have settled."
rambutan2: And another... Acquisition of Music Catalogue The Board of Hipgnosis Songs Fund Limited, the first and only UK listed investment company offering investors a pure-play exposure to songs and associated intellectual property rights, and its Investment Adviser, The Family (Music) Limited, are pleased to announce that the Company has acquired the music royalty catalogue of American hip hop and R&B music producer, Ernest 'Dion' Wilson, known as 'No I.D.'. Hipgnosis has acquired 100% of the artist's worldwide copyrights and publishing royalties, including writer's share of income, in the Catalogue which comprises 273 songs. No I.D. has achieved incredible commercial success with artists including Kanye West, Jay-Z, Alicia Keys, Usher, Rihanna, Common, Drake and Ed Sheeran. His songs and productions have collectively been streamed more than 7 billion times and his catalogue includes some of the most successful songs of hip hop culture, including: 2x platinum certified 'Run This Town' by Jay-Z featuring Kayne West and Rihanna (300 million streams); 4x platinum certified 'Holy Grail' by Jay-Z featuring Justin Timberlake (400 million streams); Jay-Z's gold certified 'The Story of O.J.' (30 million streams); Drake's 3x platinum certified 'Find Your Love' (150 million streams); Kanye West's platinum certified 'Black Skinhead' (600 million streams), 'Bound 2' (300 million streams), 'Dark Fantasy' (200 million streams), the gold certified 'Gorgeous' (200 million streams), 'So Appalled' (100 million streams) and 6x platinum certified 'Heartless' (500 million streams); and 2x platinum certified 'Kiss Me' by Ed Sheeran (500 million streams).
epo001: What is the difference between SONG and SONC? The latter are rather cheaper but (or is that because) seem to pay no dividend. Why should it be £5 a share? What scope is there for share price growth in SONG? The songs have a predictable revenue stream but isn't this likely to be constant in the short/medium term, declining thereafter. Buying the next Pink Floyd/Elton John before they become famous might do it but ultimately are they not just acquiring song books to preserve the royalty stream? EDIT: answering my own question Https://
rambutan2: Can't complain: RESULT OF C SHARE ISSUE Further to its announcement on 2 July 2020, Hipgnosis Songs Fund Limited ("Hipgnosis"), the first and only UK investment company offering investors a pure-play exposure to songs and associated intellectual property rights, and its Investment Adviser, The Family (Music) Limited, are pleased to announce that as a result of significant demand from existing and new investors the Placing has been oversubscribed, exceeding the target amount of GBP200 million. Accordingly, the Board has resolved to increase the gross proceeds of the Issue to approximately GBP236.4 million, making it Hipgnosis' biggest equity raise to date. As the Investment Adviser, The Family (Music) Limited, is in active discussions on a pipeline of Catalogues with an acquisition value of over GBP1bn, the Company continues to expect to deploy the net proceeds of the Issue within three months. The Placing has now closed and gross proceeds of approximately GBP233.4 million have been raised at a price of 100 pence per C Share pursuant to the Placing Programme described in the Prospectus published by the Company on 27 September 2019. In addition, further gross proceeds of approximately GBP3.0 million have been raised at a price of 100 pence per C Share pursuant to the PrimaryBid Offer. Merck Mercuriadis, Founder of Hipgnosis Songs Fund Limited and The Family (Music) Limited, said: "Our mantra is that proven songs produce predictable and reliable income and are a highly investable uncorrelated asset class that can rival gold. I'm very grateful for the incomparable support we have had from our great institutional investors from day 1 and delighted that they are now, with us having become one of the biggest yielders on the FTSE 250, joined with significant participation from the retail sector. This is our biggest fundraise to date, and the biggest fundraise by a LSE listed investment trust since the COVID-19 lockdown, which speaks volumes for the financial community's recognition of Songs as an asset class. In line with our current performance we will do our utmost to continue to deliver strong results for our investors by buying extraordinarily successful proven songs by culturally important artists and managing them with great responsibility. At the same time we will use the influence of our great songs and financial wherewithal to bring reform to the way the songwriter is remunerated. The songwriter is unjustly at the bottom of the traditional music business economic equation, our intention is to take the songwriter to the top! "
Hipgnosis Songs share price data is direct from the London Stock Exchange
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