Quality high-yield assets. Growth potential. Relatively low risk.
We make rock solid investments for ourselves and our investors.
- Music catalog purchase opportunities. We generally prefer more mature catalog purchases because their royalties tend to be more stable and thus less risky. And unlike institutional buyers who sometimes pay as much as fifteen times annual royalties, we are often able to purchase stable catalogs for 7x – 8x times royalties – or less. This means exceptional, relatively stable yields often over 10% per year.
- Music royalty financing opportunities.Known in the industry as “advances,” these financings act very much like secured debt. We typically make advances in the range of $300,000 to $500,000, and require very high confidence that future royalties will more than pay back our capital and earnings within just a few years. Upon closing an advance the underlying catalog’s royalties are redirected directly to us, and by law remain so until all the terms of our advance contract have been met. These types of financings can sometimes have gross internal rates of return (IRRs) over over 20%, and even high if the counterparty opts for an early repayment (“recoupment”) option.
OUR MODEL
We work below the radar to generate superior investment returns
Our ability to source music royalty investment and financing opportunities before they hit the general market gives us a significant advantage. By accessing these opportunities early, we are able to negotiate better terms and valuations, thus likely generating higher returns for both ourselves and our investors. Furthermore, by targeting opportunities that are too small for large investment funds, we are usually able to at lower multiples and or advance at higher rates, generating above-average returns for ourselves and our investors.
This combination of early access and below-the-radar investments sets us apart and provides us with a significant competitive advantage that we pass along to our investors.
Our Diligence Process
Knowledge is power - the power to avoid bad investments
Our due diligence is a critical component of our investment process, as it helps us assess the quality and attractiveness of each investment opportunity that we consider. Our process involves thoroughly reviewing and evaluating the financial, legal, and operational aspects of each music royalty stream, including the underlying contracts and agreements, the history and reputation of the songwriters and artists, the current and potential future revenue streams, and the overall market demand for the music.
Diligently applying this process to each opportunity minimizes our investment risk and maximizes the investment performance we deliver to our investors and to ourselves.
