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Home » Popular Markets » Funds and Trusts » Fund manager Hipgnosis buys entire Leonard Cohen catalogue

Specialist music industry fund manager Hipgnosis has bought the entire catalogue of Canadian singer Leonard Cohen, CEO Merck Mercuriadis confirmed late on Friday this week. The UK-based investment trust manager said it has acquired the rights to all 278 songs and their derivatives which were written by Cohen.

This includes Cohen’s song Hallelujah which has been covered more than 300 times and streamed more than five billion times. Cohen died at the age of 82 in 2016.

“To now be the custodians and managers of Leonard Cohen’s incomparable songs is a wonderful yet very serious responsibility,” explained Hipgnosis founder and Chief Executive Merck Mercuriadis. “Leonard wrote words and songs that have changed our lives.”

The deal is further vindication of Mercuriadis’ approach to acquiring and managing the rights to music within a fund management structure. Born in Canada and based in the UK, Mercuriadis is a music industry veteran who has worked with names like Beyonce, Elton John and Mary J. Blige.

Blackstone partnership is key to further acquisitions

The deal was carried out by Hipgnosis Songs Capital, which is a joint venture with Blackstone, the private equity fund manager. Under the terms of that deal, which was agreed back in October, Blackstone will deliver around $1 billion to help Hipgnosis buy music rights and manage catalogues.

Hipgnosis Song Management, founded by Merck Mercuriadis and formerly known as The Family (Music) Ltd, is one of the industry’s leading advisory firms focused on music assets and is investment advisor to investment trust Hipgnosis Songs Fund Ltd (LSE: SONG), the largest UK-listed investor in music catalogues and royalties with gross assets of c.$2.2 billion.

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“Hipgnosis Song Management has firmly established songs as an asset class,” Mercuriadis said. “This new partnership with Blackstone will deliver financial strength to invest in proven songs as well as grow our song management team and bring additional sophistication to HSM, enabling us to create greater value to our stakeholders including our songwriters and shareholders in SONG. Given the strength of our pipeline, we see the initial commitment as just the start of a long-term partnership between Blackstone and Hipgnosis that will also include co-investment with SONG.”

As part of the partnership, Blackstone took an ownership stake in HSM and will support the expansion of its infrastructure and business functions, including the development of new song management expertise, data science capabilities and technology solutions. This should allow HSM to further enhance the value of the rights it purchases, working in close collaboration with songwriters, artists and producers.

Music catalogues selling for big bucks

Hipgnosis remains very active in the music space and has scored some impressive deals already. The Cohen one is not an isolated case. It has also acquired catalogues belonging to Neil Young and the Red Hot Chili Peppers. With the advent of streaming, artists have been selling their catalogues for some very impressive sums – e.g. Sting sold his entire catalogue last month for around $250m. Bob  Dylan sold his to Universal Music for $300m.

“Now a significant and impressive portfolio has been built up, the managers have a clear opportunity to sweat the portfolio and drive returns for shareholders,” said Kepler Trust Intelligence in its February note.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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