April 14, 2024
Hipgnosis management reshuffle amid dispute with Songs Fund's board


  • The Canadian is being replaced by Chief Operating Officer Ben Katowski
  • Mercuridis to become President of Hipgnosis Songs Management

Transfer: Mark Mercuriadis is stepping down as chief executive of Hipgnosis Songs Management to become its chairman.

Merc Mercuriadis is stepping down as chief executive of Hipgnosis Songs Fund’s investment adviser following a dispute with the trust’s board.

The former music manager will become President of Hipgnosis Songs Management, the manager of HSF’s assets, which includes the back catalogs of some of the world’s biggest musicians.

Mercuriadis will be replaced by Chief Operating Officer Ben Katowski, who said he looks forward to ‘working constructively’ with the music rights fund to benefit shareholders.

The fund is currently undertaking a strategic review which could lead to its sale, restructuring or even dissolution within six months.

About a fortnight ago, Hipgnosis announced it would offer up to £20 million as ‘cost protection’ to any potential buyer to acquire its entire inventory.

There are concerns that HSM’s ‘call option’, which gives it the right to purchase the fund’s portfolio of songs, would seriously reduce the value of the assets and investors would suffer large losses.

Furthermore, HSF believes that the call options represent a conflict of interest between its shareholders and the investment advisor.

Katowski said: ‘I believe HSM is best able to deliver value for its shareholders, whether they decide whether the future of the company is as a long-term operation or the desire to pursue asset sales. Is.’

HSM said Katowski will be in charge of ‘executive management’ of the business and implementing the firm’s growth strategy.

Additionally, Mercuridis will be responsible for acquisitions, working with songwriters, artists and the music industry and growing the value of HSM’s client portfolio.

The Canadian founded the Hipgnosis Song Fund with Chic guitarist Nile Rodgers in 2018 after managing artists like Sir Elton John, Iron Maiden, Morrissey and Guns ‘N’ Roses.

He said: ‘Having invested almost $3 billion on behalf of our clients in exceptionally successful songs, we are at a critical juncture in our evolution where the service we provide to our clients is of paramount importance. ‘

The Hipgnosis Songs Fund amassed massive debt from purchasing the catalogs of dozens of musicians including Blondie, Shakira, the Red Hot Chili Peppers and Fleetwood Mac’s Christine McVie and Lindsey Buckingham.

This led to a decline in its value when persistent interest rate increases by the Bank of England reduced the attractiveness of music royalties relative to other asset classes such as bonds.

To reduce debt and finance share buybacks, Hipgnosis last year agreed to sell about a fifth of its music portfolio for £372 million on the advice of Blackstone, the world’s largest asset manager.

But in late October, investors voted against the deal and for the company to continue operating as an investment trust.

Shares in Hipgnosis Songs Fund were down 0.75 per cent at 66.5p early on Friday afternoon.

Source: www.dailymail.co.uk

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