Hipgnosis chief sounds off-key
That was the headline of a commentary in The Times business section last week. Mercuriadis has done a deal with Blackstone, who have very deep pockets, to bring them music rights deals which he is already doing for Hipgnosis Songs. Is this a conflict of interest?
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I took a small position in SONG at around 120p in Jan 21. I had intended to increase this over time. However, comments in Investors Chronicle, and other sources, relating to the way SONG values its assets, and other factors, made me hold back from further investment.
The RNS dated 12 Oct 21 explained the deal with Blackstone. As I understand it, the deal was between Blackstone and Hipgnosis Song Management (HSM)
HSM (CEO Mercuriadis) is the investment advisor to Hipgnosis Songs Fund (SONG)
I surmise that the theory is that Blackstone's investment in HSM will make HSM a better advisor to SONG, and thus improve SONG's performance. Whether this will actually happen is open to conjecture. It's also possible that Blackstone saw the deal simply as a an opportunity to make money from the investment.
In the RNS's, Mercuriadis comes across as a dynamic and positive man. However, out of the hundreds of songs purchased by SONG, how many will actually make money ?
If it was really as profitable as Mercuriadis describes it, couldn't the yield be a little higher than the current 4.23% ?
I'm an amateur at investing, so would welcome further comment