Hipgnosis First Year Results Breakdown by Numbers (Investment Analysis)

Hipgnosis has announced the results from their first year and they are very interesting.

Hipgnosis is a music investment company that has fully or partial invested in 12 catalogue for a total of 3,096 tracks in the first year.

Here are the basic numbers:

  • £120 million spend on acquiring catalogue
  • £7.2 million revenues generated
  • Fair value of assets acquired has risen to £128 million (not sure who has valued these assets)
  • Return on Investment of royalties = 6%
  • Return on Investment of Asset value = 6.66%
  • Return on Investment of S&P500 over past 12 months = 8.97%
  • It isn’t understood if that 6% return will be distributed to shareholders in the same was as a dividend or just reinvested.

Since the end of March, Hipgnosis has acquired a further 10 catalogues bringing its total spending to date to £241 million ($307 million) and total catalogue holdings to just under 6,000 songs.

Hipgnosis seems to be using music as its investment vehicle and as an alternative to other asset classes. Investing in music seems to be more comparable to investing in bonds than investing in stocks of other companies.

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