Merck Mercuriadis will step down as CEO of catalog investment advisor Hipgnosis Song Management, the company announced on Friday (February 2nd). The executive, who spent years managing the careers of artists such as Elton John, Beyoncé and Guns N' Roses before starting Hipgnosis, will move into a newly created role as president and continue to “lead” with industry stakeholders on behalf of business. he said.
Taking on the role of CEO will be Ben KatowskyPresident and CEO of HSM since joining the company in October 2022. He has nearly two decades of experience in the music industry, most recently in a seven-year stint as chief operating officer at BMG.
“One of our major goals was to bring an institutional rigor to Hipgnosis Song Management,” Mercouriadis said. “Over the past 16 months, Ben has done an amazing job building HSM's team and capabilities to deliver the best possible service to our customers and I'm sure this appointment makes us even stronger.”
Added Katovsky, “I am proud to be asked to lead HSM into its next chapter, building on all that Merck has accomplished. In my time in the music industry I have not met anyone who can match his rapport and relationships with songwriters and artists.”
Hipgnosis Song Management is the investment advisor for the Hipgnosis Songs Fund, the publicly traded royalty fund with a catalog that includes stakes in songs by Neil Young, Justin Bieber, Journey, Lindsey Buckingham, Blondie, Justin Timberlake and many other artists and writers . HSF ended a turbulent 2023 by reducing its list value after what new chairman Robert Naylor described to investors as a strained relationship with Mercuriadis-led HSM over list value.
A third Hipgnosis, Hipgnosis Songs Capital, is a joint venture between HSF and investment giant Blackstone. It is wrapped up in a proposal to acquire 29 listings for $440 million to help the treasury reduce its debt and improve its share price.
In January, the sovereign wealth fund's board filed multiple complaints against its namesake adviser, calling into question his ability to field competitive bids for its trove of assets. A major sticking point is the investment adviser's call option — an option to buy the company's listings if its contract is terminated with less than 12 months' notice, among other scenarios — which the board argues hurts the fund's ability to receive competitive bids .
The fund's board wants to make the bidding process more attractive and on Jan. 18 announced a proposal to pay bidders a fee of 20 million pounds ($25.4 million) to cover due diligence and acquisition costs when they pursue the purchase of assets of HSFs. Shareholders will vote on this proposal on February 7.
HSM said in its statement that it has sought approval from the fund to go into administration.
In further comment, Katovsky praised HSM's two clients – HSF and HSC – for their “vision, ambition and continued commitment to developing music as an asset class through HSM” and said he hoped to work well with board of directors of the fund in the future.
“I very much hope that we will be able to work constructively with the Board of Hipgnosis Songs Fund Ltd as I believe that HSM is in a position to deliver value to its shareholders whether they decide that the Company has a future as a long-term operation or wish to continue the sale of assets after their strategic review,” he said.
Added Mercouriadis, “Having invested nearly $3 billion on behalf of our clients in highly successful songs, we are at an important juncture in our growth where the service we provide to our clients is paramount. Our commitment remains stronger than ever. We look forward to continuing our work with songwriters and the creative community to create the greatest possible opportunities from the iconic and culturally significant songs we manage on behalf of HSM's clients.”
