Key Takeaways
- Three music rights catalog companies, Anthem, Iconoclast and Crescendo, are being sold.
- The market for music as an investible asset has grown significantly since Hipgnosis Songs Fund's listing in 2018.
- Private equity firms, insurance companies, pension funds, and sovereign wealth funds are investing in music royalties.
Three major music rights catalog companies—Anthem, Iconoclast, and Crescendo—are set to be sold, signaling a significant shift in the music investment market. According to sources, Iconoclast is nearing completion of its sale to Irving Azoff’s Iconic Artists Group for around $500 million. This transaction marks a high point for the company, which has been generating at least $25 million annually.
Iconoclast was founded by Olivier Chastan and backed by PIMCO, a $2-trillion investment manager. Chastan previously managed Iconic Artists Group, where his firm acquired music rights to artists such as Brian Wilson, The Beach Boys, David Crosby, Linda Ronstadt, and more. Iconoclast has also acquired catalogs from Diplo’s Mad Decent Publishing, David Cassidy, Marianne Faithfull, Tony Bennett, and The Band’s Robbie Robertson.
Anthem Entertainment, a Canadian music company with a portfolio including publishing assets and recorded master royalties of Rush, Timbaland, and Spider-Man franchise music, is also close to being sold. Influence Media will acquire Anthem as its main owner. Anthem has been generating substantial revenue from these rights.
The growth in the music investment market can be traced back to 2018 when Hipgnosis Songs Fund listed on the London Stock Exchange and raised £200 million ($260 million) for investing in music intellectual property. Since then, private equity firms like KKR and Bain have invested in major music companies, while independent catalog companies such as Primary Wave, Round Hill Music, and Reservoir have been acquiring publishing rights and master recordings.
The market has evolved significantly over the years, with more private equity firms, insurance companies, pension funds, sovereign wealth funds, global private credit investors, and family offices being drawn to music royalties due to their annuity-like returns in the streaming era. Companies like Concord and Duetti have securitized their music portfolios to raise capital from debt markets.
According to KBRA, a rating agency, it has rated more than 80 music asset-backed securities with a cumulative value of $12.9 billion since 2020. Many of these, including Concord, Lyra, and Canon, have exceeded their expected interest rates by triple the amount.
Jimmy Stone, managing partner at Alderbrook, which advises on music investing, noted in a recent research note that market activity is now shifting from catalog acquisitions to the consolidation of scaled companies. This trend suggests that investors are looking for opportunities to exit their music investments on a high note.
