Music royalty investor Hipgnosis Songs Fund (SONG) says its independent valuer has lowered the discount rate used to calculate how much its music catalogues are worth, thereby giving a big boost to the value of the investment trust’s assets.

The move was done to reflect ‘the decreased risk premium associated with music’s more stable and predictable earnings as a result of the increased consumption of music through paid streaming,’ according to Hipgnosis. By cutting the discount rate from 9% to 8.5%, Hipgnosis’s net asset value increased by 9%.

The trust buys the rights to certain songs and enjoys royalty payments when they are streamed, appear on the radio, feature in adverts, films or TV shows, or are played in shops, restaurants or gyms.

Recent acquisitions have included songs by Grammy award winning songwriter Rick James and Fleetwood Mac’s smash hits, Go Your Own Way and The Chain.

A rival investment vehicle to Hipgnosis has recently joined the London Stock Exchange. Round Hill Music Royalty Fund (RHM) has risen 4% to $1.04 since listing on 13 November. It plans to buy a catalogue of music rights that includes songs by The Beatles, Celine Dion, The Rolling Stones, Louis Armstrong, Marvin Gaye and Elvis Presley.

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