All I want for Christmas is music: Royalties to play bigger part in alternative asset space

Investors confident music funds will hit right notes

David Brenchley
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Hipgnosis' recent deal means it now owns a share of the rights to Mariah Carey's 'All I Want For Christmas Is You'. Photo: Sonia Moskowitz/Zuma Press/PA Images
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Hipgnosis' recent deal means it now owns a share of the rights to Mariah Carey's 'All I Want For Christmas Is You'. Photo: Sonia Moskowitz/Zuma Press/PA Images

Music royalties are expected to become an ever-increasing part of fund buyers' alternative asset exposure, as governance and disclosure in the space improves and more access vehicles launch.

The asset class came to prominence with the 1997 launch of 'Bowie bonds' sparking issuance of fixed income securities paying coupons of about 8% backed by royalties from artists including David Bowie, James Brown and The Isley Brothers. Over the past decade, investment houses, including Round Hill Capital, have been offering private market funds investing directly in music royalties to clients. These offerings put music royalties on the radar of fund buyers across the UK. However, until the 2018 IPO of Hipgnosis Songs Fund, they had been unable to access the asset class. Hipgnosis,...

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