It's the biggest story in the modern music business, certainly for those whose eyes are drawn to dollar signs: acquisition funds buying up music rights.
From Blackstone to KKR and beyond, recent months have seen some of the world's most powerful investment institutions throwing billions at the music market to quickly capture market share.
Many investors presumed that year zero for this trend began when Hipgnosis Songs Fund floated on the London Stock Exchange in summer 2018. And it’s certainly true that Merck Mercuriadis’s then-flamboyant-looking move to publicly list his fund was a swift accelerant of the rush to buy and sell music rights.
But Hipgnosis wasn’t the first player in this space. In the United States, for one example, Primary Wave, led by Larry Mestel, was acquiring music rights using institutional investor money from as early as 2006.
And over in the UK, one of the most notable pioneers in this space was Darren Michaelson, who joins us on this episode of the Music Business Worldwide Podcast.
After leading a bunch of activity in the music rights space, in 2018 Michaelson co-founded the Barometer Music Royalties fund, partnering with Toronto's Barometer Capital.
Barometer Music Royalties fund acquired hits made famous by the likes of Jason Derulo, Chris Brown, Notorious B.I.G and more, before the fund (and its portfolio) was sold on to a Swiss Fund of Funds earlier this year, having delivered a internal rate of return of 24.5% to investors.
Here, Michaelson tells us what he's observed from his front-row seat to the music M&A market in the past half-decade – and explains why he's so bullish about music’s growing value in the future.
The Music Business Worldwide Podcast is supported by Voly Music, the new bespoke financial management platform for people in the music business.