'You have hundreds of thousands, if not millions, of copyright holders each generating somewhat predictable revenue over long durations,' says managing partner
To quote Sam Cooke, what a wonderful world it would be, if music could help save for retirement.
But the best is yet to come when both plan sponsors and plan members find out they can do it their way and music does indeed have a place in portfolios.
Interestingly, music rights are increasingly drawing attention from asset managers, pension plans, and private equity.
As Brian Richards, founder and managing partner at Artisan explains, that shift has everything to do with streaming.
"When Spotify and Apple took off in the mid-2010s, it changed the entire game," Richards said. "It turned every artist and songwriter from a one-time sales model into a recurring revenue model—almost like SaaS."
Richards describes music as “by a mile, the most robust market” among media intellectual property (IP) assets, citing a vast volume of copyrights and steady cash flows.
"You have hundreds of thousands, if not millions, of copyright holders, each generating somewhat predictable revenue over long durations," he said.
This comes from the rise of streaming services like Netflix and Spotify, which has increased music consumption and royalty potential, effectively making it easier to track and verify revenue streams.
Philip Moross, CEO at of UK-based Cutting Edge Group highlighted he transitioned to investing in music from real estate because of the potential for long-term, non-correlated returns. That predictability is exactly what pension funds want and look for.
"From the point of view of a pension fund or an insurance company that has known obligations and liabilities, it's a pretty good investment to make, providing you buy the right quality and back the right to people to do it," he said.
That predictability is exactly what pension funds want and look for. Richards points out that copyright protection, often lasting decades, aligns well with pension fund liabilities.
“There's long copyright protection on a piece of intellectual property (IP) and likewise, pensions and other sorts of investors have long term horizons for the types of assets that they like to invest in,” he explained.
“It’s a great match. You can reasonably project the cash flows for decades. That’s the key driver to why pension fund managers are interested in this space.”
Josh Gruss, CEO of Round Hill Music reinforced this point, contrasting music with other asset classes.
“You can listen to Back in Black by AC/DC 5,000 times. We listen to the same tunes. Try doing that with a movie where you watch it once or twice. The constant consumption of the same music is a big difference between film and music.”
Streaming also adds transparency, emphasized Moross as the digital shift helps to track exactly when something was played and where.
“There is a direct correlation between the amount of money that is being earned and the music royalties that accrue from that,” he explained. “Because the growth is there, you should see a growth in the music royalties that go alongside that.”
The cash flow appeal is strong, but what about returns? While there’s a widespread depending on risk and capital structure, Richards estimates targets of 12–17 per cent, who also emphasized that music isn’t particularly accessible to retail investors.
“There are a handful of publicly traded platforms, but it’s really the BlackRocks, Blackstones, and PIMCOs of the world driving capital into music,” Richards said. “They could be buying anywhere from 100 million dollars worth of copyrights up to a couple billion dollars worth. It really just depends on their strategy.”
The barriers to entry remain steep, a challenge he believes is holding some pensions back.
“The best way to approach the market is to partner with a team that has experience, or a particular angle on how to acquire these copyrights and how they're going to get to those returns,” he said.
Those teams, Moross emphasized, must also know how to value the music they’re buying, acknowledging the importance of diversification.
“You can’t buy one song; you need a portfolio. You don’t want to be looking for hits. That’s the biggest risk—trying to pick the next Taylor Swift hit and getting it wrong.”
Another risk often cited is artist reputation as Gruss believes one of the biggest misconceptions in music rights investing is the assumption that artists always write the songs they perform. However, much of the value lies with professional songwriters, whose work spans across dozens of performers and genres.
This distinction is not only important for understanding what investors are buying, it also significantly reduces reputational risk.
“When we’re buying these compositions, you’re buying from the songwriter,” Gruss said. “A lot of people think that the artist is the songwriter as well, but most often than not, that’s not the case.”
Because these catalogs contain songs written for a wide variety of performers, they’re inherently diversified. That reduces the chance of portfolio damage from scandals or controversies tied to a single artist.
“There’s basically zero risk to an R. Kelly-type of thing in our portfolio, because we just have so many different songs from so many different artists,” he said, pointing to Jim Vallance who wrote songs like Run to You and Summer of ‘69 for Bryan Adams, Heart’s What About Love and even Glass Tiger’s Don’t Forget Me When I’m Gone.
Richards sees the trend in music rights investment continuing, especially for long-term institutional investors. The only thing holding some back is a simple lack of understanding and access.
He describes the space as inherently complex, which can be intimidating to institutional investors unfamiliar with how copyright structures work or how revenues are generated.
"Most people are just not familiar with it, and so they really don't understand how it actually works, though the large funds are getting increasingly knowledgeable," he said.
As for Gruss, music rights offer more than just financial value, they bring a personal, day-to-day connection that few asset classes can match. As both a fund manager and an investor in his own vehicles, Gruss finds satisfaction not just in the returns, but in the cultural presence of the assets themselves.
“I walk outside, and there’s a good chance I’ll hear Summer of ’69. That’s our catalog. My ears always perk up when I hear our catalog throughout my day. It makes life a little more interesting.”
