Niche-Focused Funds Are the Next ‘Natural Step’ in Music Investment

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The rising cost of capital is inspiring a new crop of genre-specific funds to find opportunity in narrow genres within Latin, dance, film and TV, and… Nickelodeon?

While those tween comedies may not be household names, fans stream them worldwide, and unlike Springsteen’s masters and publishing rights — which Sony bought for $500 million in 2021 — the rights to their scores sold for tens of millions, presenting, for some, an appealing and approachable investment.

The Nickelodeon shows’ music is an example of the kinds of deals being done by a new crop of music investment funds that are focused on acquiring the one type of music they know best, often for a much lower price than the deals making headlines.

The principals of these funds, which have raised between $100 million and $200 million from banks and investment firms, say the primary difference between them and funds like Primary Wave and Hipgnosis, which have institutional and private equity backing, is that their success hinges on a lower cost of entry and therefore present less risk., founder/CEO of Multimedia Music, which recently bought the music income and copyrights to scores from the Nickelodeon shows.

Each fund faces its own challenges, but in an investment class, where the slowing of streaming growth and high interest rates are prompting greater investor scrutiny, these funds present the next natural step, says, president of Concord. “We are now at the evolution stage of the investment thesis,” says Valentine, who will become Concord’s CEO in July. “There is still supersize growth in some of these genres — like Latin, dance, EDM.

 

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