(RHM) Round Hill Music Royalty Fund — Strong royalty performance
Round Hill Music Royalty Fund’s investment objective is to provide investors with an attractive level of regular and growing income and capital returns from investment primarily in high-quality music intellectual property. To achieve this objective, it seeks to invest in a songwriter’s copyright interest in a musical composition or song, together with the rights in the recording of these (known as the master recording rights), along with all other rights and assets considered relevant by the manager.
A healthy music-streaming market coupled with Round Hill Music Royalty Fund’s (RHMRF’s) attractive portfolio resulted in a strong net publisher’s share (NPS) performance in 9M22, up 36.1% y-o-y to $21.8m. Organic NPS growth from the original portfolio was 15.9% over the same period. Since its launch in November 2020, RHMRF has delivered a NAV total return (TR) of c 28.4% and 12.5% annualised (to end-December 2022 in US dollars), above the targeted annualised NAV TR of 9–11%. Rising interest rates have dented sentiment in non-traditional assets and RHMRF’s share price retrenched notably in 2022. We believe the quality of the underlying portfolio will continue to be reflected in growing NPS, which in turn should support the NAV, and, ultimately, the share price performance.
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