Music royalties fund Hipgnosis strikes a discordant note

Hipgnosis, a fund hoping to profit from song royalties, sounds beguiling. But is best avoided for now, says Max King.

With bond yields so low, the hunt continues for reliable sources of income that can be packaged up into a fund. The main stipulation for these funds to be regarded as "alternative assets" is that their returns are deemed to be "uncorrelated" to equity markets: insensitive to the economic cycle.

Merck Mercuriadis, a music-industry professional, had the bright idea of creating a listed company, Hipgnosis (LSE: SONG) that would buy up the rights to songs and then collect the royalties from music streaming, which has largely replaced physical ownership and permanent downloads as the preferred way to listen.

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Max King
Investment Writer

Max has an Economics degree from the University of Cambridge and is a chartered accountant. He worked at Investec Asset Management for 12 years, managing multi-asset funds investing in internally and externally managed funds, including investment trusts. This included a fund of investment trusts which grew to £120m+. Max has managed ten investment trusts (winning many awards) and sat on the boards of three trusts – two directorships are still active.

After 39 years in financial services, including 30 as a professional fund manager, Max took semi-retirement in 2017. Max has been a MoneyWeek columnist since 2016 writing about investment funds and more generally on markets online, plus occasional opinion pieces. He also writes for the Investment Trust Handbook each year and has contributed to The Daily Telegraph and other publications. See here for details of current investments held by Max.