Investment Approach

Investment Criteria

Investment Objective

The Company’s investment objective is to provide investors with an attractive level of regular and growing income and capital returns from investment primarily in high quality, music intellectual property.

Investment Policy

In order to achieve its Investment Objective the Company will invest in a songwriter’s copyright interest in a musical composition or song (being their writer’s share, their publisher’s share and their performance rights) together with the rights in the recording of the musical composition or song (known as the master recording rights) (“Copyrights”) together with all rights and assets considered by the Investment Manager to be ancillary thereto. Although typically the Company anticipates acquiring the entirety of a copyright owner’s interest in a musical composition or song, the Company may acquire a lesser or minority interest in a Copyright or Catalogue and enter into joint venture or other arrangements in respect of the same.

The Company intends to invest in small to medium sized Catalogues (typically 100-1000 Copyrights) that are diversified by artist, genre, decade and royalty type. The Company also intends to invest predominantly in classic, older Copyrights with enduring appeal and which experience consistent usage. Such compositions have generally reached a steady state of earnings and are not subject to the natural decline in earnings and value that typically occurs within the initial ten years of a composition’s life.

Typically, the revenue generated by the Copyrights will comprise:

  • Performance royalties: generated from public performance, broadcasting and digital streaming. This includes: terrestrial and satellite radio and television broadcasts, live concerts, music in bars, hotels, restaurants, shops, sporting events, cinemas, YouTube and internet performances and theatrical performances.
  • Mechanical royalties: fees the copyright owner receives upon the sale of any recording for the use of the underlying musical composition. Every time a digital download or a physical CD is sold a mechanical royalty is paid to the owner of the copyright.
  • Synchronisation royalties: collected when the copyright is used in movies, television programming, advertising, ringtones and video games.
  • Digital interactive royalties: digital royalties from interactive streaming services are considered a hybrid of mechanical and performance royalties. In the UK and USA, 50 per cent. of the royalty is paid by the streaming service as a performance royalty to the relevant Performing Rights Organisations around the world. The remaining 50 per cent. is treated as a mechanical royalty payable to the owner of the copyright.
  • Other royalties: for example royalties generated from print or sheet music, greeting cards, toys and clothing, and theatre music.
  • Royalties and fees payable in respect of master recordings: master recordings are the copyright in the master recording of a musical composition or song. They earn synchronisation royalties and generate income from sales of both physical and digital records as well as from the streaming services. Additionally, master recordings earn significant royalties from digital radio, YouTube and similar streaming platforms.

The Company will seek to acquire both the publishing and administration rights (being the right to collect royalties and revenues and commercially exploit the Copyrights) in Copyrights thereby allowing it not only to collect all or some portion of the royalty revenues but also to create value and unlock upside through diligent and creative Catalogue management.

The majority of the returns from the Company’s investments will be derived from the royalty streams. However, Round Hill will seek to enhance returns through improved royalty collection, pro-active licensing activity and increased usage and song exposure.

The Company may acquire Copyrights for consideration comprising cash and/or Shares. It may also acquire vehicles (or interests in such vehicles) that own Catalogues as opposed to the Catalogues themselves. It may also, subject to the approval of the Board and Shareholder approval, acquire Copyrights and Catalogues from the Investment Manager, parties related to the Investment Manager and funds managed by the Investment Manager, subject to the prospectus.