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How Asset-Backed Securities Are Changing the Music Catalog Market
The music catalog market is turning to asset-backed securities as the Hipgnosis and Round Hill funds come to an end.
Investments in music royalties keep thriving in the private market — where the Hipgnosis and Round Hill funds continue to do business — but the money is now flowing to asset-backed securities, the same financial vehicle used to create “Bowie bonds” in the 1990s. ABS debt is purchased by institutional investors such as pension funds and insurance companies with time horizons that match the long durations of music assets. One source points to artificial intelligence as a factor that could jeopardize stable cash flows if it causes a major economic shift like pirated music did in the early 2000s.
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