The next multi-million dollar sale of music rights is sealed: Together with Dundee Partners, the family office of the former Goldman Sachs manager Stephen Hendel, the financial investor KKR is taking over a catalog with around 62,000 rights to works by Kobalt Capital.

The purchase price is around $ 1.1 billion, as both parties announced on Tuesday.

Benjamin Fischer

Editor in business.

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Kobalt Capital is the investment arm of the British music company Kobalt Music. The portfolio comes from the Music Royalties II fund and contains "primarily" rights to compositions and lyrics of songs from various music genres. Which songwriters these come from or which works it is about was not disclosed. However, it should be, among other things, those that were recorded by stars like The Weeknd or Lorde.

"Primarily" also suggests that rights to music recordings are also part of the portfolio, according to the industry magazine Billboard those of the indie label Glassnote.

Cobalt will continue to be responsible for the administration of the rights and the collection of royalties, it said in the announcement.

At the beginning of the year, Kobalt had already sold AWAL, a service provider for independent artists and indie labels, as well as its agency for the management of performance rights to Sony Music.

The $ 430 million deal is currently under review by UK competition regulators.

Blackstone also picks up a billion

In addition to music companies, financial investors have also been increasingly interested in rights to hits that have been tried and tested over the years, which drives prices up. In an environment of low interest rates, buyers expect long-term secure income through regular royalty payments from the evaluation of the respective rights - especially through the growing streaming sector, but also, for example, by placing pieces of music in films or advertising.

The Financial Times reported at the beginning of last week that a consortium with the support of the investment company Apollo Global Management and the US holding Eldridge Industries were also said to have been interested in the cobalt catalog. Last year Eldridge Industries acquired author rights for the rock band The Killers. Apollo, in turn, recently invested around one billion dollars in the newly launched fund HarbourView, which, among other things, also wants to buy music rights.

With Blackstone, another powerful financial investor underscored its focus on music in the middle of last week.

Together with the fund Hipgnosis, which has been listed on the London Stock Exchange since mid-2018 - one of the busiest buyers, especially of authors' rights in the recent past - Blackstone initially plans to invest one billion dollars in the purchase of catalogs from established artists.

In addition to the launch of the new fund, Blackstone also participates in the fund company of Hipgnosis boss Merck Mercuriadis, the former manager of stars like Elton John and Guns'n'Roses.

So far, Hipgnosis has spent around two billion dollars on rights to the works of Neil Young, Shakira and Blondie.

In November, Hipgnosis also took over rights to around 33,000 Kobalt songs for $ 322 million.

KKR and Bertelsmann work together

Probably the most sensational deal of the past few months with a single artist landed last December, the publishing division of the world's largest music company, Universal Music, with Bob Dylan.

The superstar is said to have received up to $ 400 million for his author rights to more than 600 works.

Universal's brilliant IPO in September once again underlined the strong growth of the music industry - and why many investors from outside the industry are interested in music.

Investing in music is not new territory for KKR. From 2009 to 2013, the financial investor held a 51 percent majority in the recently newly founded Bertelsmann music division, BMG. During this time, the area would be built up by buying various sales, especially in the publishing area. BMG has been a wholly-owned subsidiary of the Bertelsmann Group since March 2013. In March, however, KKR and BMG formed an alliance to jointly acquire music rights without the "transfer or sale of shares in BMG or the establishment of a joint venture," as the companies announced.

At the beginning of the year KKR took over some of the rights (author and recordings) from One Republic frontman Ryan Tedder.

For its part, BMG had acquired a package of rights from Tina Turner at the beginning of October and announced further deals.

The first deal from Allianz is still a long time coming.