Fund Administration Case Study: Hipgnosis Songs Fund Limited

• Published date: 12 November 2020
• Subject Matter: Finance and Banking, Corporate/Commercial Law, Intellectual Property, Media, Telecoms, IT, Entertainment, Financial Services, M&A/Private Equity, Commodities/Derivatives/Stock Exchanges, Corporate and Company Law, Copyright, Music and the Arts
• Law Firm: Ocorian
• Author: Ms Mariana Enevoldsen

Director, Mariana Enevoldsen explains how Ocorian has supported the Guernsey-registered Hipgnosis Songs Fund Limited in bringing an entirely new asset class to the London Stock Exchange - some of the most commercially successful songs of all time.

Our client

Hipgnosis Songs Fund Limited (Hipgnosis), a closed-ended Guernsey registered investment company which was admitted to the London Stock Exchange (LSE) in July 2018 after an initial public offering (IPO) raising '202.2 million. Since inception, Hipgnosis has raised over '1.05 billion from the market, with its most recent equity raise in September 2020 grossing '190 million in just 72 hours.

Hipgnosis brought a new asset class to the LSE, offering investors a pure-play exposure to songs and associated musical intellectual property (IP) rights. Both Hipgnosis and its investment adviser, The Family (Music) Limited (TFM) were founded by Merck Mercuriadis, the former manager of hugely successful international recording artists such as Elton John, Iron Maiden and Beyoncé.

Scenario

Merck's vision is to create a '2 billion fund that invests in the best music catalogues whilst recognising the contribution of songwriters and promoting their interests in the economic equation. This would provide the investment community with access to a new asset class that, through the expert management of the songs acquired would deliver strong and growing returns for shareholders.

As a newly formed investment adviser, TFM not only required an experienced fund administrator that could provide a highly personalised service and support it through the fund's initial stages, but it also needed an administrator with requisite scale to service the fund throughout its ambitious growth journey.

A success story

Hipgnosis has been a real success story, raising over '1.05 billion (gross equity capital) in total through its IPO in July 2018 and five subsequent issues.

This level of success led Hipgnosis to transfer the entirety of its issued share capital from the Specialist Fund Segment to the Premium segment of the Main Market in September 2019. In March 2020, Hipgnosis became a constituent of the FTSE 250 Index after just 20 months since its first fundraise.

In September 2020, Hipgnosis took two major steps on its growth journey. Firstly, it completed the acquisition of the entire share capital of Big Deal Music Group, a highly regarded, boutique full-service song company which owns a portfolio of copyright interests in global hit songs...