Shamrock Capital, the private equity firm best known for buying music assets and entire companies, is about to become a lender, too, after closing on a fund near $200 million to loan money to intellectual property owners across music, film, TV, games and sports, the company announced this week.
The inaugural Shamrock Capital Debt Opportunities Fund raised $196 million from both existing and new limited partners and will be managed by Shamrock partners and other investment professionals in Los Angeles that include pension funds, foundations and financial institutions, according to the press release.
Shamrock made news in 2020 for buying Taylor Swift’s Big Machine catalog from Scooter Braun’s Ithaca Holdings, which controversially acquired the master recordings through its purchase of Big Machine in 2019. The company, which has about $3.8 billion of total assets under management, typically buys and invests in music assets such as Stargate’s publishing catalog, trade publication AdWeek and fantasy sports platform FanDuel. But Shamrock views its Debt Opportunities Fund “as a natural extension” of its acquisition business that will “provide optionality and flexibility to content owners,” said Patrick Russo, a Shamrock partner, in a statement.
Although not all $196 million will be loaned to music IP owners, the amount is large enough to make Shamrock a major player in the business of funding independent artists and songwriters who want to retain their IP. The Debt Opportunities Fund joins a varied group of companies, such as digital distributor STEM and alternative lender Lyric Capital, that give creators capital rather than purchase their IP outright or acquire rights for limited terms.
The lending business is an alternative to the multi-billion-dollar market for buying publishing and master recording rights. Artists and songwriters — often late in their careers — have been selling their rights at historically high multiples to Hipgnosis, Primary Wave, Round Hill and Concord, among others, who have tapped into investors’ recent interest in music. Lending is more suited to younger, less-established artists and companies that might go overlooked by purchasers. But with large distributors that provide label services — Universal Music Group’s Virgin Music Label & Artist Services and Sony’s AWAL, for example — well-funded independent artists have alternatives to signing away their rights.