Private equity backing turned song catalogs into uncorrelated financial asset classes

Evidence

The most successful “song management” firm is Hipgnosis, founded and run by Merck Mercuriadis, formerly employed as a manager by Beyoncé, Elton John, and Guns N’ Roses. Hipgnosis owns or partially owns more than sixty-four thousand songs, a thousand of which are No. 1 songs, and many of which were acquired when it purchased Kobalt Music Group. As of 2023, Hipgnosis is valued at over $2 billion. In 2021, it received backing from Blackstone, the largest private equity company, to invest another billion dollars in acquiring catalogs and copyrights. … When appearing in public or in the press, Mercuriadis is often seen with his partner, Nile Rodgers (legendary songwriter/guitarist/producer/singer of Chic fame), emphasizing the positive impact Hipgnosis will have for the songwriting community. When addressing investors, his tone changes: “I founded Hipgnosis to give the investment community access to extraordinarily successful hit songs by culturally important artists and to establish songs as an uncorrelated asset class with attractive risk adjustment returns.” This is finance-speak for transforming music into a relatively low-risk grouping of investments (“asset class”) that can help diversify an investment portfolio. “Uncorrelated” with macroeconomic trends such as recessions because people will continue to listen to music, this is a way to abstract economic value away from music production and into the realm of financial circulation and speculation. — Andrew deWaard, Derivative Media, 228

Categorization

• DEFINE: Defines the ‘uncorrelated asset class’ pitch as finance-speak for diversifying a portfolio.
• XREF: Directly relevant to the reader’s goal: Hipgnosis + Blackstone is the canonical private equity rollup of music catalogs; the Mercuriadis/Rodgers split shows the dual-facing marketing. — connects to: Art valuation now treats artworks as portfolio assets with uncorrelated returns — Ève Chiapello, Financialisation of Valuation, 81
• SEED: Angle: ‘The two faces of catalog acquisition — Nile Rodgers for the songwriters, black-box finance-speak for Blackstone — and how that double address might shape the songs actually financed.’