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Hipgnosis has ‘Sweet Dreams’ with David Stewart on board

13 May 2019

Former Eurythmics’ guitarist, songwriter and record producer joins advisory board of Hipgnosis Songs after selling music catalogue to royalties fund.

Former Eurythmics’ guitarist David A Stewart has joined the advisory board of Hipgnosis Songs (SONG) after agreeing to sell his entire catalogue of 1,068 songs to the royalties fund which, according to broker Liberum, has amassed over 3,500 songs in the 10 months since its launch.

Stewart, who co-wrote 13 US number one hits between 1980 and 2005 with Eurythmics’ singer Annie Lennox, including ‘Sweet Dreams (Are Made of This)’ and ‘There Must Be An Angel’, joins Chic guitarist and producer Nile Rodgers and other music industry experts advising Hipgnosis fund manager The Family Music on which songs to buy and how to commercialise them.

Outside the Eurythmics, Stewart has also produced and written songs for Tom Petty, Shakespear’s Sister, Mick Jagger, Bono and Bob Dylan.

Merck Mercuriadis, the former Sanctuary Group boss and Elton John and Beyonce manager who founded both Hipgnosis and The Family Music, said: ‘This is an incredible moment for Hipgnosis. I have been lucky enough to know Dave since the summer of 1983 and I have spent most of those 35 years marvelling at his incredible work.

‘I consider him to be one of the most important songwriters, artists and producers of all time.’

Stewart, 66, said he was excited to work with Mercuriadis. ‘Merck understands that without the song there is nothing and therefore holds songs with the utmost respect, hence understanding their impact on society and their long-term value.

‘He sees his company more like a song management company unlike many publishers who act more like a collection agency and wait for the money to pour in,’ he stated.

Hipgnosis raised £200 million in its second attempt at a flotation a last summer. Targeting a total annual return of around 10% and looking to yield 5% from quarterly dividends once fully invested, SONG has so far proved a hit with investors.

Income funds in particular like its exposure to pop royalties, an ‘alternative’ asset class outside conventional stock markets whose prospects are underpinned by the growth in online music streaming.

Last month the fund raised a further £142 million a share placing that sold out in one day, attracting additional backing from Invesco and charities fund manager CCLA Investment Management, which respectively own 11.9% and 10.6%, according to Refinitiv data.

The purchase of Stewart’s catalogue, which includes his writer’s, artist’s and producer’s share of income, is the second since the latest fund raising. Last month it bought the music catalogue from US songwriter Brittany Hazzard, also known as ‘Starrah’, who has also joined the SONG advisory board.

Since listing at 100p per share last July the shares have risen to 103.9p and stand at a near 7% premium over their estimated net asset value of 97.4p, according to Morningstar. They currently yield 3.4%.

Investment company news brought to you by Citywire Financial Publishers Limited.

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