Hipgnosis Song Fund delays financial results over concerns of under-valued songs

Hipgnosis Song Fund – which owns the rights to tracks by world-famous artists – has postponed sharing its financial results due to concerns that songs are being undervalued.

The music fund was set up and launched by Chic legend Nile Rodgers and Merck Mercuriadis – former manager of acts including Elton John and Beyoncé – and was set to share its half-year results today (December 19).

However, it has confirmed that it will be delaying the publication of the results due to concerns that music catalogues and songs are not being valued high enough amid a sale.

As reported by The Independent, the UK firm decided to sell just under 30 music catalogues to the sister fund, backed by investment giant Blackstone in September this year.

The deal valued the assets at about $418million (£360million), however, this number was down by nearly a quarter compared to the valuation it was given back in March.

It came as the company revealed it did not receive any better offers as interested parties “could not justify” a higher price, and also sold 20,000 “non-core” songs for about $23million (£20 million) – nearly a 15 per cent discount on a September valuation.

Amid the potential sale, Hipgnosis – which spent $1billion (£720m) acquiring artists’ back catalogues in 2021 – stated that the valuation received from an independent valuer is “materially higher than the valuation implied by proposed and recent transactions in the sector”.

As confirmed by the outlet, a spokesperson for Hipgnosis has said that the company has sought advice from its investment adviser, Hipgnosis Songs Management, which gave the board “concerns as to the valuation of the company’s assets in its interim results”.

It was also reported that the fund launched a strategic review two months ago, which could potentially lead to the replacement of founder and chief executive Mercuriadis.

The half-year results are now expected to be published by December 31.