Disclosure – Non-Independent Marketing Communication
This is a non-independent marketing communication commissioned by Hipgnosis Songs. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.
Hipgnosis Songs Fund (SONG) has achieved plenty in its short life, aside from having raised over £1bn of capital. Round Hill Music Royalty Fund joined SONG in the listed universe by IPO’ing in late 2020, providing some interesting comparatives for investors, as well as the potential for some friendly competition which in our view will likely be good for investors of both funds. With SONG’s manager recently having hired one of the co-founders of Round Hill Music to help SONG deliver “best in class market disclosures”, we anticipate SONG taking a significant step forward in providing better information on its portfolio. In our view, this offers the potential for the share price premium to expand (average premium of 2.3% since IPO), with the shares currently trading on a slight discount to JPMorgan Cazenove’s (FX adjusted) NAV estimate of 117.6p. Both SONG and Round Hill Music’s managers have highlighted the potential for the discount rate applied by their valuers to be reduced, which, if it were to occur, would boost the NAV.
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