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
  0.80 0.65% 124.40 10,774,898 16:35:08
Bid Price Offer Price High Price Low Price Open Price
122.60 123.00 123.80 122.60 123.60
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 116.62 32.31 3.42 36.2 1,507
Last Trade Time Trade Type Trade Size Trade Price Currency
17:47:38 O 14,764 124.384 GBX

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Date Time Title Posts
09/9/202109:50Hipgnosis Songs Fund Limited418

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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 123.60p.
Hipgnosis Songs Fund Limited has a 4 week average price of 122.60p and a 12 week average price of 119.60p.
The 1 year high share price is 128p while the 1 year low share price is currently 114p.
There are currently 1,211,214,286 shares in issue and the average daily traded volume is 1,573,553 shares. The market capitalisation of Hipgnosis Songs Fund Limited is £1,506,750,571.78.
anhar: When I described it as "somewhat" risky I meant by comparison with the common type of investment trust that invests in listed shares. I should have spelled that out. ITs are measured usually by net asset value per share. Where those assets consist of listed shares the NAV at any point is easily established, an actual value which could be realised by a sale, not just an opinion, and indeed many publish the figure daily. By contrast the value of SONG music assets is an estimate based on a DCF calculation of future royalties. That is obviously an opinion rather than fact and it follows that there can be no certainty that these assets could be realised at the published NAV figures. Consequently the NAV of SONG is a much less dependable figure than that of other ITs that invest in listed shares and since NAV is the most important measure of ITs, in my view this makes it more risky than those. In fact I hold a couple of other more typical ITs. For this reason I would not bet big on SONG alone but as part of my widely diversified income port and in proportion to oher holdings, I accept it.
grahamg8: Monty, There is no reason why the catalogues couldn't be bought outright, which is what SONG do, or leased for a fixed period. It would all depend on the contract. But there isn't much of an argument for leasing because the leaseholder will be building up value from promotion and marketing, and then have to give back the rights later on. If you are referring to the discounted value this is a way of valuing future income (which is a bit of an educated guess) at todays prices. The theory is that you, me and any business would rather have their money now than in a few years time. So for example £1m royalties expected in 2026 would have a present value of say £700k. Or turning it all round I would pay £700k now for £1m to arrive in 5 years time. SONG work out how much they think the songs will earn in the future, apply the discount and quote their estimate of the present value. The market takes a view on how believable these figures are and buys/sells shares at a price which gives the company as a whole its Mcap, which could be higher or lower than the published catalogue value.
rambutan2: More Mac: Merck Mercuriadis, Founder of The Family (Music) Limited and Hipgnosis Songs Fund Limited, said: " Christine McVie is one of the greatest songwriters of all time having guided Fleetwood Mac to almost 150 million albums sold and making them one of the best-selling bands of all time globally. In the last 46 years the band have had three distinct writers and vocalists but Christine's importance is amply demonstrated by the fact that eight of the 16 songs on the band's Greatest Hits albums are from Christine. It's wonderful for us to welcome Christine to the Hipgnosis Family and particularly wonderful to reunite her once again at Hipgnosis with Lindsey Buckingham. Between Christine and Lindsey we now have 48 of 68 songs on the band's most successful albums. " Christine McVie said: " I am so excited to belong to the Hipgnosis family, and thrilled that you all regard my songs worthy of merit. I'd like to thank you all for your faith in me, and I'll do all I can to continue this new relationship and help in any way I can! Thank you so much!" https://uk.advfn.com/stock-market/london/hipgnosis-songs-SONG/share-news/Hipgnosis-Songs-Fund-Limited-Acquisition-of-Music/85782610
rambutan2: grahamg8, each catalogue IS unique. There is only one Neil Young and only SONG (and Neil) own those rights. And will do so for at least the next 70yrs. Likewise for Blondie etc etc etc. There is no legal competition. The Big Three straddle the whole of the music business, so have competing internal interests, too many catalogues to manage and way more costs. Great businesses, but not competition to SONG. In fact SONG is a user of some of their services. Both they, SONG and anyone who owns quality rights will benefit from the growth in the digitisation of music. But SONG is a pure play on that theme, designed to sweat the assets. And also to champion the writers' cause and up their cut - and thus SONGs.
rambutan2: grahamg8, the song rights are a unique asset and as the mkt starts to appreciate the increased earnings power which the digitisation of music has given them, it will award them a greater value. Yes, this will be a one off rerating and will likely have occurred within the next 5yrs. Of course, their ability to increase their earnings will continue, even if only at the rate of inflation. Song rights do of course have a very long track record of earnings power, albeit not in an investment trust structure. It is worth noting that SONG's performance fee only kicks in above a hurdle of 10% pa compound of the share price total return (not the nav). It's my experience that when used, performance fees are always set at a level where they are well within reach.
grahamg8: Thanks for the comments guys. This looks like a chicken and egg problem. If I buy a property to rent out my assets go up, my income follows. Buying song rights seems to me to be a bit different. They have no intrinsic value other than the ability to generate future income. So the asset value is calculated based on assumptions about what that income will be. If SONG can demonstrate that the income does indeed rise over time then the value goes up ie income first value second. In practise we should be interested in the share price movement and the income, since our return is the sum of both gains. As an investment trust SONG will distribute most of its surplus as dividends and I expect the LFL growth rate to be quite small. At the moment there is a huge drive to add new assets but new shares are being added at pretty much the same rate. 2020 annual report portfolio was 13,291 songs; yesterday it was 64,555 songs. With little track record the discount rate is high, but should fall over time.
hectorscrackhouse: from Bloomberg today htTps://www.bloomberg.com/opinion/articles/2021-02-02/meet-hipgnosis-ceo-mercuriadis-who-s-buying-songs-from-neil-young-to-shakira 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.
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: 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! " https://uk.advfn.com/stock-market/london/hipgnosis-songs-SONG/share-news/Hipgnosis-Songs-Fund-Limited-Result-of-C-Share-Iss/82834324
Hipgnosis Songs share price data is direct from the London Stock Exchange
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