A group led by Apollo buys the songbook of singer “Despacito” Luis Fonsi
Private equity giant Apollo Global Management has led the acquisition of the songbook by Luis Fonsi, the artist behind the hit hit Despacito – Wall Street’s latest music copyright lawsuit as a regular yield machine.
Apollo, the $481 billion investment group, committed $1 billion last year to buy the copyrights to the songs through a partnership with HarbourView Equity Partners, an investment group founded by the former investment banker Sherrese Clarke Soares.
Financial terms were not disclosed, but industry executives estimated Fonsi’s catalog could fetch up to $100 million.
Fonsi’s songbook is HarbourView’s first major acquisition as it enters a frenzied market in which Blackstone, KKR, Pimco and other investors are pumping billions into music, viewing music publishing rights as credit-type assets that offer a predictable return.
From its launch in October through the end of December, HarbourView has entered into 24 music deals spanning more than 10,000 songs, a portfolio that Soares says will pull in between $20 million and $30 million in annual net royalty revenue, it said. she told the Financial Times.
Apollo channels liquidity to HarbourView through its credit arm, which includes Athene, the retirement annuity group it merged with last year.
“Most importantly, their funds come from credit pools, which means we can give a very good return for this type of risk. It’s safe retirement money to really put to work,” said Soares, managing director of HarbourView, which leads Apollo’s $1 billion allocation.
Music copyrights have soared in value as streaming gives old hits new life. Specialty funds, music labels and private equity groups have been eager buyers.
Over the past year, musicians such as Bob Dylan, Stevie Nicks, Neil Young and Paul Simon have sold their songwriting catalogs for nine-figure sums.
Soares, who previously worked at Morgan Stanley, called his business an “alternative fixed income strategy.”
The daughter of Jamaican immigrants, she believes her focus on diversity gives her an edge as she competes with other investors for deals. “I want to be the platform that sees the value in all these genres that live outside of legacy rock,” she said, adding, “We’re off to the races.”
Fonsi’s catalog spans more than two decades of work, but the Puerto Rican artist is best known for Despacito, who topped the US music charts for 16 consecutive weeks in 2017 – tying Mariah Carey for the record at the time.