A 257-year-old asset manager profited from Ariana Grande's hit single '7 rings,' and it's a business Wall Street's getting excited about

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Music licensing has become a more popular target for private equity seeking dependable revenue.

"For us, what was most attractive initially was that a music publishing copyright is effectively a government-sanctioned monopoly over a piece of intellectual property that gives you, the owner, a very long-term opportunity to earn cash flows," Barings managing director Alex Thomson told Business Insider.Thomson's private equity business, Wood Creek Capital Management, entered the music business in 2006, when there were a handful of similar buyers.

A long-term focus fits copyright's long life. In the US, a song's copyright lasts for 70 years after the death of the last living composer. After those 70 years, the song enters the public domain and is no longer protected by copyright laws. Concord, for example, owns the collection of duo Richard Rodgers and Oscar Hammerstein, who created a number of popular musicals that went on to win 34 Tony Awards, 15 Academy Awards, the Pulitzer Prize and two Grammy Awards. Among their works is"The Sound of Music," including the song"My Favorite Things."

"One of the things you have to do when you think about how you take care of these great catalogs and these great artists' legacies is you have to be a steward of their works," Thomson said."If somebody comes and says 'I want to license your song and rewrite the lyrics and make them deeply offensive,' we're not going to do that. With '7 rings,' they had a clever interpretation.

 

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