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Litmus Music Launches With $500M to Spend on Catalogs

Hank Forsyth and Dan McCarroll's new venture is backed by Carlyle Global Credit

Hank Forsyth and Dan McCarroll announced the launch of Litmus Music, a new company focused on acquiring publishing and recording rights, on Thursday. The pair of longtime music executives are backed by Carlyle Global Credit, which agreed to commit $500 million to the venture.

“Litmus will acquire and manage music rights… across genres, geographies and vintages,” the company said in a statement. “… The partnership will focus on creating value for artists and investors through the thoughtful management of music.”

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Litmus Music is the latest entrant in a crowded field. Among the many companies in this space, Universal Music Group, Sony Music Entertainment and Warner Music Group are all vying for the publishing and recording rights of prominent stars, cutting high-priced deals with David Bowie, Bob Dylan, Paul Simon, Bruce Springsteen, Neil Diamond, Aerosmith and Sting. BMG and KKR have purchased rights from the likes of John Legend and ZZ Top. Then there’s Hipgnosis, which has struck deals with Neil Young, Lindsey Buckingham, and Shakira, among others, and Primary Wave (Stevie Nicks, Devo, and more).

HarbourView Equity Partners launched last year with up to $1 billion in backing from Apollo Global Management; like Litmus Music, it said it was in the hunt for a wide range of music rights. “We want to invest differently, not colored by preconceived notions,” founder and chief executive Sherrese Clarke Soares told The New York Times. “Just because something is in the R&B sector, or in the Latin sector, we don’t believe that it should have a discount.”

In addition, Influence Media Partners launched a $100 million fund last year with the goal of purchasing “award-winning catalogs of some of music’s most influential female music creators.” BlackRock and Warner Music Group invested $750 million in Influence Media Partners earlier this year.

To compete in this space, Forsyth and Dan McCarroll plan to leverage their “deep connections to record labels, distribution [companies], artist management and the artists themselves,” according to the Litmus Music announcement. Forsyth previously held positions as EVP at Warner Chappell and GM of Blue Note in addition to working for a decade in operations and strategy at EMI, while McCarroll served as president of both Warner Brothers Records and Capitol Records.

Matt Settle, managing director with Carlyle Global Credit, said in a statement that “our partnership with Hank and Dan, two highly regarded executives in the music industry, underscores the value we see in music rights, driven by strong tailwinds and the uncorrelated nature of the asset class.”

“Streaming and other new mediums have enabled more ways than ever to consume content,” Settle continued, “and we believe Litmus has the right mix of skills, experience and connectivity to develop a successful and differentiated business, and to care for works that people have spent their lifetimes creating.”