Photo Credit: Giorgio Trovato
Investment firm Northleaf Capital Partners has officially unveiled a $500 million “strategic alliance” with Spirit Music Group owner Lyric Capital, which will manage “certain music royalty catalogs” as part of the deal.
Northleaf Capital Partners, which oversees more than $18 billion in assets, formally announced its half-billion-dollar catalog partnership with Lyric Capital this afternoon. Northleaf itself led the $500 million investment, while the Quebec Deposit and Investment Fund, Canada’s second-largest pension fund, “was a significant co-investor.”
Under the newly finalized union, “funds managed by Northleaf hold an interest in certain music royalty catalogs managed by Lyric Capital Group,” the involved parties indicated. Longtime Spirit Music higher-up Jon Singer will remain on as chairman, the entities also specified, “while Lyric Capital Group will continue to oversee all aspects of the Spirit Music Group catalog.”
Needless to say, the $500 million deal will allow “the 25-year-old Spirit Music Group to continue to build upon its already impressive legacy of evergreen copyrights and present day hit songs.” And on this front, the indie publisher’s “portfolio is largely made up of mature music royalty assets managed by Lyric Capital,” including interests in over 100,000 songs – tracks from The Beach Boys, Mariah Carey, Mary J. Blige, and Crosby, Stills & Nash among them.
Addressing the strategic alliance in a statement, Northleaf managing director Matthew Sparks said: “We look forward to supporting the growth of this mature and diverse song catalog of evergreen copyrights. Northleaf will continue to expand our music royalty portfolio by adding attractive assets with strong potential, building on our strategic approach and ability to provide flexible capital to support ongoing growth.”
Notwithstanding the billions of dollars that have been injected into the music-IP space since 2020’s start – seemingly elevating the price of catalogs – Martin Laguerre, EVP and head of private equity and capital solutions for the Quebec Deposit and Investment Fund, pointed to “the sector’s positive long-term trends” in a statement of his own.
“We are pleased to invest alongside Northleaf in a diversified music royalties portfolio composed of firmly established assets under the solid management of Lyric,” said Laguerre. “This first investment in music royalties under our Capital Solutions strategy will leverage the sector’s positive long-term trends and provide stable cash flows and attractive capital protection for our clients.”
Two days back, Blackstone made a billion-dollar investment in music rights – and secured an ownership stake in Hipgnosis Song Management. The latter serves as investment advisor for Hipgnosis Songs Fund, or the publicly traded entity (LON: SONG) that has dropped billions of dollars on music IP since debuting in 2018.
And to kick off October, the Round Hill Music Royalty Fund revealed that it had invested $342 million in catalogs between early August of 2020 and June of 2021’s conclusion.