Kobalt to buy copyrights with $100m fund injection

Kobalt to buy copyrights with $100m fund injection

Kobalt is planning to spend $100m on advances and new copyrights in the next 12 months.

The move appears to represent a change in the company's business model: Kobalt has previously tended to only act as administrator for artist and songwriter's publishing rights. Now it is looking to acquire or part-acquire those rights.

The company said in statement that it was 'in talks to invest in and acquire rights in royalty streams generated by some of the world's most popular artists and songwriters'.

$75m of the funds are understood to be coming from Kobalt Capital Ltd. - an FSA regulated and authorised investment advisor. This capital will be now be used to pay bigger advances that the firm believes can take on the major music publishers.

If required, the remaining $25 million will come from leveraging the equity by drawing down funding from the company's credit facilities.

The company has yet to make acquisitions so far this year, but it has invested approximately $20 million in seven deals, according to company executives.

Kobalt CEO and founder Willard Ahdritz said: "In order to respond to existing and new clients' needs for bigger advances, or part or whole acquisitions, Kobalt formed an investment advisory company in 2011 which now has substantial capital resources backed by blue chip family office and other institutional investors."

"As we enter our second year of activity of KCL we are looking at stepping up our investment in royalty advances and copyrights acquisitions with a focus on rights where value uplift can be achieved through Kobalt's efficient royalty collections and value enhancement through active management and marketing," Kobalt Capital CEO Johan Ahlström said in a statement.


Tags: Publishing, Kobalt

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