UK - First State Media Group has acquired the music copyright to 25,000 songs, which will form part of a media fund aimed at pension funds.
Music copyright holdings are seen as a steady and dependable source of returns by some investors.
The songs were originally assembled by DreamWorks Music Publishing. The music copyright catalogue will be exclusively managed by First State Media Group and has been acquired by Colonial First State Global Asset Management.
First State Investments (UK) is part of Colonial First State Global Asset Management which formed a joint venture in late 2006 with a management team led by Steve McMellon for the purposes of acquiring and managing media assets.
Ricardo Fernandez, director of A&R at Sony BMG, told Global Pensions that while a catalogue such as the one purchased by First State could be expected to generate some steady revenues from big name songs, the marketing of less well known tunes could be used to create additional value.
“Some songs quite literally have a life of their own, but clever marketing to firms like advertising agencies can really add to the portfolio’s income,” he said.
Warwick Negus, CEO of Colonial First State Global Asset Management, said: “Music copyright assets are attractive for investors because they generate global income streams in the form of predictable and recurring cash flows.
"In addition, they hold considerable long term growth potential through the active promotion and management of the underlying musical works.”
Music copyright assets generate global cash flows from a range of sources, including worldwide royalties paid for the use of specific musical works.
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