The Round Hill Music Royalty Fund is looking to drum up over £280mln to fund acquisitions of music royalty rights.
New York-based investment company Round Hill Music, which owns the royalty rights to several early Beatles hits as well as musical artists ranging from Gil Scott-Heron to Neil Sedaka and Craig David, has generated over US$150m of net royalty income since launch.
Round Hill is planning to float a new investment trust in London and attract investors with its target of a 4.5% annual dividend and a total return of 9-11%, according to Music Business Worldwide.
Founder Josh Gruss, who set up Round Hill in 2012 after stints at Sony Music and Atlantic Records, is looking to tap London’s proven investor interest in music royalties with a US$375mln (£287m) fundraising for the new fund.
The new royalty fund's pipeline of intended investments includes an existing fund run by Round Hill and a portfolio of 120,000 songs from more than 40 catalogues by artists including the Beatles, Louis Armstrong, Eartha Kitt, Rolling Stones and Celine Dion.
These catalogues are collectively worth around US$363mln, according to the company.
London’s music investment companies include One Media IP Group PLC (LON:OMIP), which specialises in acquiring and repackaging nostalgic music and TV programmes, and the much larger Hipgnosis Songs Fund Ltd (LON:SONG), which since the end of March has acquired between 50% and 100% shares of music catalogues including of Blondie co-founders Debbie Harry and Chris Stein, Barry Manilow, The Pretenders’ Chrissie Hynde, Richie Sambora from Bon Jovi, Nikki Sixx from Mötley Crüe, RZA from the Wu-Tang Clan, and successful producers and songwriters Mark Ronson, Rodney Jerkins, RedOne and No I.D.
London had been chosen for the company’s IPO because Hipgnosis had paved the way and “educated the market”, Gruss told the Sunday Times, while the new fund's official intention to float announcement should be issued in the coming days.
The institutional fundraising is being led by broker Cenkos.