A change in the management of Hipgnosis amid a dispute with the Board of Directors of the Song Fund

  • The Canadian will be replaced by Chief Operating Officer Ben Katowski
  • Mercuriadis will become head of Hipgnosis Song Management

MOVING: Merck Mercuriadis is stepping down as CEO of Hipgnosis Songs Management to become its president

MOVING: Merck Mercuriadis is stepping down as CEO of Hipgnosis Songs Management to become its president

Merck Mercuriadis is stepping down as chief investment adviser to the Hipgnosis Songs Fund, as a dispute with the fund’s board continues.

The former music executive will become head of Hipgnosis Songs Management, HSF’s asset manager, which houses the back catalogs of some of the world’s biggest musicians.

Mercuriadis will be replaced by Chief Operating Officer Ben Katowski, who said he hopes to “work constructively” with the Music Rights Fund for the benefit of shareholders.

The fund is currently undergoing a strategic review that could lead to its sale, reorganization or even dissolution within six months.

About two weeks ago, Hipgnosis has announced that it will offer any potential buyer up to £20 million in “cost protection”. To get their entire catalogue.

It follows concerns that HSM’s “call option”, which gives it the right to buy the fund’s song portfolio, would lead to a sharp decline in the value of the assets and leave investors with significant losses.

In addition, HSF believes that the purchase option represents a conflict of interest between its shareholders and the investment advisor.

“I believe HSM is best able to deliver value to its shareholders whether they decide the company has a future as a long-term operation or want to pursue an asset sale,” Katowski said.

HSM said Katowski will be responsible for “executive management” of the company and implementing the company’s growth strategy.

Meanwhile, Mercuriadis will be responsible for acquisitions, working with songwriters, artists and the music industry and enhancing the value of HSM’s clients’ portfolios.

The Canadian founded the Hipgnosis Songs Fund with dapper guitarist Nile Rodgers in 2018 after a career managing artists such as Sir Elton John, Iron Maiden, Morrissey and Guns ‘N’ Roses.

He said: “Having invested nearly $3 billion on behalf of our clients in extraordinarily successful songs, we are at an important juncture in our development where the services we provide to our clients are of paramount importance.”

The Hipgnosis Songs Fund had accumulated huge debts from purchasing the catalogs of dozens of musicians, such as Blondie, Shakira, the Red Hot Chili Peppers, Christine McVie and Fleetwood Mac’s Lindsey Buckingham.

This led to their value falling when successive interest rate increases by the Bank of England reduced the attractiveness of music returns compared to other asset classes, such as bonds.

To try to reduce debt and finance stock buybacks, Hipgnosis last year agreed to sell nearly a fifth of its music portfolio For £372 million of funds advised by Blackstone, the world’s largest asset manager.

But in late October, investors voted against the deal and allowed the company to continue operating as an investment fund.

Hipgnosis Songs Fund shares It was down 0.75 per cent at 66.5 pence early Friday afternoon.

(tags for translation) Daily Mail

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