In June 2021, exactly one month after Hipgnosis Songs Fund (HSF), the self-proclaimed disruptor in the music industry, acquired the Red Hot Chili Peppers’ catalog for $140 million, founder Merck Mercuriadis responded in Variety to criticism of his company, saying that HSF was paying far too much for music, inflating its market value.
Hipgnosis Songs Fund soars after $1.4 billion sale is agreed | ANC
"There's no bubble here. A bubble is when someone overpays for something that doesn't have the kind of metrics that these investments have," he said.
Fast-forward to this week, and the music catalog market hasn’t exploded yet. Hipgnosis, on the other hand, is imploding.
On Thursday, investment banking firm Shot Tower Capital completed its months-long strategic review of HSF’s assets, a revaluation that came after investors lost confidence in HSF’s leadership. Among other revelations, the report values HSF’s assets at an average of $1.95 billion — $670 million less than the $2.62 billion valuation it received last year.
