The Family (Music) is already acting as an investment advisor for the publicly traded Hipgnosis Songs fund that Mercuriadis founded and for which it also offers music assets that the fund can buy. This fund currently has a market cap of $ 1.47 billion and has a portfolio that includes works by Neil Young, Al Jackson Jr., the B-52s, Blondie, Journey, Lindsey Buckingham, Journey, Steve Winwood and Tricky Stewart, among others. throughout the transactions that Mercuriadis sourced and negotiated for the fund.
But Mercuriadis has publicly stated that it has built up a billion dollar deal pipeline and lately its fundraising from the stock market has failed to meet its targets, resulting in negotiated deals leaving d ‘other suitors who can conclude them, according to sources. Therefore, for months, Mercuriadis has been considering turning to private equity funds to buy musical assets, according to informed sources. Billboard.
However, sources claim that such a move would trigger complex negotiations not only with Blackstone with the Hipgnosis Song Fund. The easy part would be knowing how to structure the transactions. Similar to the arrangement Sony Music had with its joint venture partners in EMI from 2012 until it bought out those partners in 2019, any deal Sony would go through, it would also have to offer half of EMI ownership. Thus, The Family (Music) could offer deals to its private and public companies on a 50/50 basis, i.e. if the public fund has the money to participate.
The hardest part would be negotiating under what circumstances Blackstone’s family and private finance might work on its own, when the public fund has no dry power to participate in the new deals Mercuriadis is proposing, according to a finance official.
In addition, other industry sources point out that the agreement between the Hipgnosis Songs Fund and Family (Music) contains a contingency if the latter decides to end its relationship with the fund. The investment advisory agreement states that The Family (Music) has the “unconditional right” to purchase the fund’s “portfolio” of songs, up to six months after the date of termination. He would have to pay a purchase price that is greater than fair market value or market capitalization – whichever is greater – or any price offered by a credible third party.
Therefore, some wonder if a possible deal between Blackstone and The Family (Music) would also include the purchase of the music assets of the Hipgnosis Songs Fund. However, last February, Mercuriadis declared Billboard, “This is not a scenario that anyone is considering.” Moreover, another source claims that this is not part of the deal being negotiated between Blackstone and Mercuriadis.
Representatives for The Family, Blackstone and SESAC, which is owned by Blackstone, have not commented or responded to emails or phone calls seeking comment.