kobalt morgan stanley partnership

Kobalt is set to invest at least $500 million in catalogs as part of a just-detailed partnership with Morgan Stanley. Photo Credit: Sven Piper

Kobalt is preparing to inject the better part of $1 billion into the catalog space under a newly announced partnership with Morgan Stanley Tactical Value.

Francisco Partners’ Kobalt and the investment bank’s Tactical Value division unveiled their tie-up today. According to the formal release put out by Morgan Stanley, the agreement will see it and Kobalt “invest more than $500 million in committed capital to acquire music copyrights.”

But in its own announcement message, Kobalt claimed that it and Morgan Stanley-managed funds will “invest more than $700 million to acquire music copyrights.” Moving beyond the precise cumulative value of the IP purchases, the involved parties intend to deploy the massive tranche “over the next few years,” per Kobalt.

The former AWAL owner Kobalt is poised to handle sync, licensing, administration, creative, and investment services alike for the copyrights, both entities signaled. Goldman Sachs, which is decidedly bullish on the music industry’s long-term revenue potential, “acted as an advisor in this partnership.”

In a statement, Morgan Stanley Tactical Value MD Cameron Smalls, formerly an Amplified Music Rights board member, touted the overarching deal as well as “Kobalt’s infrastructure and deep commitment to bettering the music industry.” Meanwhile, Kobalt CEO Laurent Hubert described Morgan Stanley’s “trust in Kobalt” as “a testament to our platform and leadership in the music industry.”

Given the above-noted timetable for the at least half-billion-dollar investments at hand, logic suggests that Kobalt may reveal the union’s first song-rights buyout sooner rather than later.

More immediately, though the operational woes of pioneering catalog purchaser Hipgnosis Songs Fund have dominated headlines as of late, multiple companies are adding high-profile bodies of work to their portfolios.

September and October quietly delivered significant plays from Reservoir Media (for Latin songwriter and producer Rudy Perez’s catalog), Seeker Music (with Phil Plested, co-writer on Lewis Capaldi’s “Before You Go”), Primary Wave (for a stake in singer-songwriter Eddie Rabbitt’s catalog), BMG (covering Jet’s recordings and different acts’ IP), Carlyle Global Credit-backed Litmus Music (for Katy Perry’s catalog), and HarbourView Equity Partners (encompassing Christine McVie’s share of Fleetwood Mac recorded royalties).

Also during September, Concord inked an acquisition deal for Mojo Music & Media, before shareholders in Round Hill’s songs fund in October overwhelmingly approved Concord’s previously proposed $468 million buyout offer. Elsewhere during 2023’s first 10 months, Armada Music’s BEAT, CTM Outlander, AP Music Royalties, Anthem Entertainment, and others yet announced new investments of their own.