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Round Hill Music Royalty Fund and the golden oldies

Published: 09:26 15 Mar 2022 EDT

Round Hill Music Royalty Fund Ltd -

Round Hill Music Royalty Fund Ltd (LSE:RHM, OTC:RHILF) is well-placed to continue benefiting from increased streaming levels in the music business, according to Cenkos Securities.

Judging by the group’s Spotify playlist, the fund has got the sentimental singleton cat owner market sewn up, with melodramatic schlock such as “Can’t Help Falling in Love” and “Total Eclipse of the Heart” featuring in the most-played list alongside sentimental schmaltz such as “Just the Way You Are”, “What A Wonderful World” and the self-pitying “All by Myself”.

Round Hill Spotify Playlist

Somehow, a genuine rocker in the form of the Beatles’ “I Saw Her Standing There” has sneaked into the Top 10, just above George Harrison’s cover of James Ray’s “I’ve Got My Mind Set On You” – reputedly the first single the Beatle bought on his first trip to the USA.

Cenkos refers to Round Hill's “mature catalogues” and it is certainly on the money there, with the Drifters’ sublime “Under the Boardwalk” (1964) and the Chordettes’ sickly "Lollipop" (1958) also featuring in the Round Hill Spotify Top 10.

“The age profile data reveals that over 95% of RHM’s portfolio is in songs that are over 10 years old. This reflects the manager’s focus on songs that have already experienced their initial period of rapid decay and have reached a steady-state of popularity.” Cenkos noted.

As funky as a taffeta ball gown the fund’s music catalogue may be but it does offer a highly predictable source of income, Cenkos argues.

“RHM is differentiated from its direct peer – Hipgnosis Songs Fund (SONG) – by having a more mature catalogue profile. We have witnessed older catalogues (also known as ‘Standards’) continue to outperform frontline music on streaming platforms which further drives up their value,” Cenkos said.

Take that, Adele, Dua Lipa and Olivia Rodrigo!

(And take that, Take That – rival boy band Backstreet Boys’ annoyingly catchy ranking as the second most played in Round Hill's Spotify list with 900mln plays on streaming services).

“The attractiveness of the music industry has not gone unnoticed, and we observe several new entrants into the marketplace as well as an acceleration of activity within existing ones.

“Alternative investment managers such as KKR, Blackstone and Apollo have each earmarked over US$1bn each into either partnering with an established player or acquiring music royalties directly.

“We also saw Vivendi list Universal Music Group in a reflection of demand for such assets,” Cenkos noted.

Spotify streams

As well as Hipgnosis, the UK boasts another listed music intellectual property(IP) fund in One Media iP Group PLC (AIM:OMIP) and that also focuses on legacy acts.

Round Hill’s acquisitions have included the acquisition of the publishing catalogue of the film score composer and erstwhile Yes guitarist, Trevor Rabin; the master royalty income rights to the first seven albums by Foreigner from Dennis Elliot, the original drummer of the Anglo-American hard rock group; the master royalty income of 532 original recordings from the legendary American soul group, The O’Jays; and various other rights to recordings made by the likes of Supertramp, Pearl Jam, Heart. Whitesnake and Alice in Chains.

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