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Music Catalog Market to Stay Attractive Despite Slowing Industry Growth: Shot Tower Capital
The music catalog market will stay attractive amid slower industry growth, says boutique investment firm Shot Tower Capital in a new report.
That’s because Shot Tower, the boutique investment banking firm specializing in music asset transactions, says the sector still enjoys plenty of investor interest, adding that the industry is recession-resistant, as proven over time. Moreover, Shot Tower notes that while some institutional investors like KKR, Vine Alternative Investments and Elliot Management have exited the music asset space, other private equity groups have enteredit or increased their investments in the sector, including Hellman & Friedman, which bought a majority stake in Global Music Rights; New Mountain Capital, which acquired BMI; and Flexpoint Ford, which launched One of the reasons Shot Tower thinks institutional investors will remain interested in investing in music assets is because of the increasingly popular use of asset-backed securitization (ABS) to finance deals due to “stable royalty income streams.” According to Shot Tower’s analysis, a buyer using asset-backed securitization can pay about 10% higher than a bank-financed buyer while achieving the same equity return.
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