Round Hill Music Royalty Fund Ltd., the UK-listed vehicle of Round Hill Music, reported a 32% year-over-year jump in revenue in 2022 to $32.4 million, after completing the deployment of $86.5 million of funds raised from a share sale into acquisitions.
The last two of those acquisitions were in the first quarter of 2022 when the company acquired the catalog of Whitesnake frontman and Deep Purple lead singer David Coverdale and the rights to 90s Seattle rock band Alice In Chains.
Round Hill Music has been buying up catalogs and music rights after raising $282 million from its IPO on the London Stock Exchange in November 2020.
Since its IPO, Round Hill Music says it has delivered an economic net asset value total return of 35%. Economic NAV in 2022 rose 13% from a year earlier to $519.6 million from $459.7 million, reflecting an economic NAV per ordinary share of $1.27.
The listed company’s income from initial investments in full-year 2022 grew 15% year over year, excluding the impact of acquisitions made in 2021 and 2022.
Since its inception in August 2020, Round Hill Music has built a portfolio of 51 catalogs, representing a collection of more than 120,000 songs.
These songs are diversified by income type and genre, with a majority being rock music “because of its enduring demand and loyal consumption across various age groups and geographies.”
“The positive results that we have delivered on behalf of Round Hill Music Royalty Fund stem largely from the efforts of our entire 70 plus team, whose deep expertise in catalog management and passion for music, when applied to our catalog, translates directly into sustainable value and revenue growth.”
Josh Gruss, Round Hill Music LP
“They are also strategically concentrated in older vintages preceding the early 2010s. This means that they have already demonstrated durable, time-tested royalty cash flows that have withstood various economic cycles,” said Round Hill Music Royalty Fund Chairman Robert Naylor.
The company’s catalog also includes songs by British rock band Bush, Celine Dion, country music star Carrie Underwood, The Supremes, and Wilson Pickett.
Round Hill Music’s catalog also spans a diversified roster of artists and songwriters who have performed or written globally renowned songs like All By Myself (Carmen/ Rachmaninoff), What A Wonderful World (Thiele/Weiss), and You Can’t Hurry Love (Holland/Dozier/Holland).
The company also owns a 29.1% stake in Carlin, which has built up a catalog of rock and pop classics such as Elvis Presley’s Are You Lonesome Tonight, The Chordettes’ Lollipop, Bruce Woolley & The Camera
Club’s Video Killed the Radio Star and Christmas classics including Santa Baby, Jingle Bell Rock and Christmas (Baby Please Come Home).
The fair market value of Round Hill Music’s portfolio jumped 13% in 2022 to $602.6 million, which the company attributed to a combination of active rights management approach, underlying growth and continued recovery from the COVID-19 pandemic.
Round Hill Music generates its revenue from a variety of income streams including from streaming services, radio, live performances and the use of its music in TV shows, films and advertisements. In 2022, Round Hill generated 69% of its income from music publishing rights and 31% from masters rights.
The company’s expanded portfolio in 2022 allowed it to book a profit last year. For the year ended Dec. 31, Round Hill Music’s net profit reached $493,797, versus a net loss of $2.4 million for the period from August 2020-December 2021.
Last year, Round Hill Music says that it made multiple successful placements of 560 songs across high profile films, television series and brand campaigns, including the following:
- All By Myself by singer songwriter Eric Carmen, in advertisements for Adobe Photoshop and the popular Mexican snacks company, Sabritas
- In the Meantime by Spacehog in the trailer for Marvel Studios’ Guardians of the Galaxy Volume 3
- Best Day of my Life in a Nutella advertisement via a partnership with Ferrero
- Alice In Chains’ Rooster in the Netflix series, Super Pumped
Of these placements, Round Hill said Lancôme’s use of What a Wonderful World in its latest campaign was the company’s highest value sync to date.
Round Hill Music also received higher digital revenues from new license agreements with TikTok and Facebook parent company Meta on what it says are “more favorable terms,” resulting from strategic focus on rights data quality and management enhancement.
“The positive results that we have delivered on behalf of Round Hill Music Royalty Fund stem largely from the efforts of our entire 70 plus team, whose deep expertise in catalog management and passion for music, when applied to our catalogs, translates directly into sustainable value and revenue growth,” said Round Hill Music LP CEO Josh Gruss.
Round Hill Music LP is the Round Hill group’s investment manager, which manages more than 150 catalogs totaling over 330,000 songs with a combined value of about $1.2 billion.
“The opportunities for music monetization are expanding and Round Hill is well placed to take advantage of these and other structural tailwinds. Given the quality of our catalogs and the positive outlook for the music industry, we are excited and energized about the future,” added Gruss.
Meanwhile, Naylor said Round Hill Music Royalty Fund is currently undervalued by the market. This view was supported by two independent valuation reports commissioned by the company’s board.
Overall in 2022, the wider Round Hill group represented by New York-headquartered Round Hill Music Royalty Partners completed more than $200 million in investments in 40 acquisitions in 2022.
The deals were made through Round Hill Music’s private equity funds, including Round Hill Music Royalty Fund III and Round Hill Music Royalty Fund III Plus, as well as Round Hill Music Royalty Fund.
Looking ahead, Round Hill Music Royalty Fund Chairman Robert Naylor said the company is bullish about its prospects in the year ahead after a challenging year for financial markets in 2022.
“Exciting new prospects are also continually emerging, including in new territories and with new technology advances, providing increasing opportunities to license music and grow royalties.”
Robert Naylor, Round Hill Music Royalty Fund
“Exciting new prospects are also continually emerging, including in new territories and with new technology advances, providing increasing opportunities to license music and grow royalties,” said Naylor.
“Given these positive structural tailwinds, the quality of the company’s time-tested Portfolio of music rights and the proven experience of the Investment Manager, we are confident that, even in challenging market conditions, Round Hill Music Royalty Fund is well positioned to continue to deliver sustainable revenue and value growth.”
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