(Bloomberg) – After selling his last company, Songs Music Publishing, for around $160 million, Matt Pincus has started striking new deals in the recording industry. The more he did, the more he realized that there were few companies focused solely on music investments. So he started another one.
Pincus announced Thursday that he has raised approximately $200 million from Jonathan Soros, Schusterman Family Investments and investment bank LionTree LLC to create a new company that will invest exclusively in music assets. This sum includes the money he invests in the company, which is called Music.
Investment in the industry has skyrocketed in recent years, with streaming services like Spotify Technology SA driving revenue to new heights. Two of the three major record labels have listed their stocks on stock exchanges in the past two years, and catalogs of artists like Bob Dylan and Sting have sold for hundreds of millions of dollars. But many of those assets reside in various funds, overseen by managers with no particular music expertise.
“I really wanted to create an investment company that’s just focused on music,” Pincus, 49, said. “I didn’t just want to work for a private equity firm.”
Pincus plans to invest about $25 million per deal in music technology, artist management and infrastructure businesses, taking a minority stake and serving on the board. He will also participate in larger deals for music catalogs and record labels with private equity firms and research start-up companies.
The veteran music executive said he would be free to strike deals without approval from his investors and has no set timeline. He wants to be able to stay on a farm as long as necessary. He sold Songs after 15 years.
Pincus predicts that music valuations will slow or soften, due to rising interest rates and fears of a recession. It plays to its strengths, he said, provided the whole market doesn’t collapse.
Son of legendary private equity executive Lionel Pincus, Matt Pincus brings a rare combination of hands-on industry experience and financial expertise. He grew up on the New York music scene before enrolling in business school. He then worked for the music company EMI.
Pincus started Songs Music Publishing in 2004 and signed bands like The Weeknd, Lorde and Diplo.
Pincus met LionTree CEO Aryeh Bourkoff during the Songs sale, and joined the investment banking firm as an executive-in-residence after completing the company’s sale to Kobalt Music. Pincus helped LionTree grow his music practice and made several investments himself.
“Matt’s independence, background and the relationships he’s built across the ecosystem give him a unique perspective on where music is headed,” Bourkoff said in a statement.
The new company may invest in some song catalogs, but Music will focus more on companies that power the modern music business.
Pincus has already made similar deals on his own. He is one of the largest investors in Splice, a music creation platform, and HIFI, a financial services company for the industry. These investments will remain separate from this fund.
“I’ve done it three or four times now, and a few have gone well,” he said.
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