Blackstone music deal hits right digital note

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Blackstone is adding music to its digital-content playlist by investing $1 billion with Hipgnosis Song Management to acquire rights and manage catalogs from stars like Shakira. The private equity firm looks to be hitting the right note, jennifersaba says.

Hipgnosis, founded by former Elton John manager Merck Mercuriadis, advises UK-listed Hipgnosis Songs Fund

, which lets investors get a piece of the action in music royalties. The listed group reckons that, in the year to March, its investors made a total return – comprising appreciation in the market value of its right portfolio plus dividends – of nearly 16% in dollar terms. That's more than enough to appeal to a buyout baron.

Other private equity shops are planting flags in the music market, too. KKR earlier this year bought a majority stake in a catalog from OneRepublic artist Ryan Tedder valued at $200 million, according to Reuters. But for Blackstone, the deal with Hipgnosis, in which it will also take a stake, reflects a broader push into digital content across the board.

- Blackstone and Hipgnosis Song Management on Oct. 12 announced a partnership in which Blackstone will provide $1 billion to acquire music rights and manage catalogs. As part of the deal, Blackstone is also taking an undisclosed ownership stake in Hipgnosis, owned by music executive Merck Mercuriadis.

- Hipgnosis is an investment adviser to the UK-listed Hipgnosis Songs Fund, which has around $2 billion in gross assets.Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

 

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