Hipgnosis Song Management, renowned for its pioneering approach to songs as an asset class, has experienced a series of departures among its senior executives and staff members in recent months. This shakeup comes as the company seeks to bolster investor confidence by exploring the sale of assets before an upcoming crucial vote.
According to LinkedIn posts from employees and an official statement from Hipgnosis, key personnel, including Chief Music Officer Ted Cockle, as well as the heads of sync operations and song management on a global scale, along with an executive vice president of digital and innovation, have all announced their intentions to leave the company since March.
Insiders suggest that Hipgnosis Songs Fund Ltd., which has been in operation for approximately five years, has been actively seeking buyers for a portfolio of assets ahead of its first continuation vote. During this vote, investors will determine whether the publicly traded trust should continue operating under the management of its founder, Merck Mercuriadis, or if the liquidation of all assets should take place.
The company’s stock, represented by the ticker symbol SONG on the London Stock Exchange, has declined by about 14% since the beginning of the year and has witnessed a 28% drop since its initial public offering in July 2018. As of Wednesday, July 12, the stock was valued at £0.75 ($0.97).
At its current price, SONG’s market value stands at less than half of its $2.2 billion net asset value, leading Mercuriadis to consider the sale of non-core assets within the fund. Analysts from Jefferies and other investment banks have long advised Hipgnosis to sell non-core songs in order to generate cash and stabilize the share price. Furthermore, some investors in the Hipgnosis Songs Fund have expressed a desire for the company to sell non-core assets to facilitate stock repurchases.
Apart from boosting the stock price, such a strategy would provide Hipgnosis with additional capital, potentially enabling the issuance of a special dividend to shareholders before the continuation vote at the upcoming annual meeting in September.
In the event that investors vote against the continuation of the fund and opt for asset liquidation, Mercuriadis, in conjunction with Hipgnosis Song Management—majority-owned by private equity firm Blackstone—would likely have the right to bid on the fund’s assets. Alternatively, if an auction takes place, Mercuriadis, along with Blackstone, would possess matching rights. Sources speculate that Mercuriadis and Blackstone would be inclined to repurchase the portfolio’s most iconic music assets, excluding the non-core assets, for their Blackstone-backed fund, Hipgnosis Songs Capital.
Hipgnosis Songs Fund is scheduled to release its annual results for the year ending March 31 on Thursday. In December, the company reported a 7.5% increase in revenues amid a challenging environment that, according to founder Mercuriadis, “fundamentally undervalues the company.”
On Wednesday, Hipgnosis announced the departure of its Chief Music Officer, Ted Cockle. Cockle, formerly an executive at Universal Music Group known for nurturing the careers of artists like Lewis Capaldi, Bastille, and Emeli Sandé, joined Hipgnosis Songs as President in 2020. Mercuriadis expressed gratitude for Cockle’s contributions and expressed hope for future collaboration.
Last week, Tom Stingemore, the Global President of Sync & Creative at Hipgnosis Song Management, announced his departure on LinkedIn. Stingemore, who joined the company in 2021 to develop its sync and creative operations, stated that his mission was accomplished, and he is now exploring new endeavors.
The exits of Cockle and Stingemore follow the departures of several other senior staff members. Nick Jarjour, formerly the Global Head of Song Management at Hipgnosis Songs Fund, left his position in late May, while Tony Barnes, the Executive Vice President of Digital & Innovation, announced his forthcoming departure in March to lead the metaverse gaming company he co-founded, Karta. Barnes remains employed by Hipgnosis at present.
