Kobalt Capital has closed its second managed fund to invest in music copyright, with a capacity of $600 million (£458m), comprisng $345 million (£263.4m) of equity commitments plus debt.
The investment fund is being led by UK pension fund RPMI Railpen, along with other institutional investors.
Kobalt Capital’s first music royalties fund launched in 2011 and spent over $350m (£267.2m) on music copyright. The investment fund management is a subsidiary of Kobalt, whose music publishing operation aims to enhance the value of catalogues within the fund through its technology platform and services.
Kobalt's Alison Donald recently discussed their business model with Music Week. The company's recent signings include Rudimental, Fraser T Smith and The Kooks.
“From day one, Kobalt’s position has been that we don’t own copyright because it creates a conflict of interest with our clients,” said Willard Ahdritz, founder & CEO of Kobalt and CIO of Kobalt Capital.
“I’m proud to say that we’ve shifted over three billion dollars in asset value back to all of our clients on our platform with this no ownership model. When our clients do want to capitalize on the increased value, which Kobalt has created, this managed fund with institutional investors gives them an option to sell their copyright and still stay with Kobalt - it’s been a very successful model.”
Johan Ahlström, CEO of Kobalt Capital, added: “Having crossed six years of activity in the first fund we have made over 100 investments and delivered attractive returns to our investors. With the backing of prominent institutional investors, it validates our strategy and outlook for a robust music industry that is trending upward.”
Craig Heron, deputy investment director at Railpen, said: “This opportunity provides us with just the type of long-term returns that we need to help us meet our mission statement to pay members’ pensions securely, affordably and sustainably.
Venture capitalist Bill Maris’ new fund has led a $14m (£10.7m) second instalment into Kobalt’s recent Series D round of growth capital, bringing the total amount to $89m (£67.9m). Maris has joined Kobalt’s board of directors.
Subscribers can read our interview with Kobalt's Sas Metcalfe here.
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