There are several reasons why music royalties seem attractive at the moment. Mr Martini believes investors are drawn in by a rate of return that is insulated from macroeconomic trends. Music rights offer a predictable stream of income—people tend to tune in no matter what the economy is doing. Owning a song is more fun than buying a slice of a company. And once they have been bought, songs need not require much attention.
Not everyone agrees that buying royalties should be a passive business, though. In 2018 a former manager of Iron Maiden and Guns N' Roses, Merck Mercuriadis, founded an investment company called Hipgnosis. More than 90% of the firm's shares are held by institutional investors, including axa, an insurer, and the Church of England. The aim is to improve the lot of songwriters, who do not have the same opportunities as performers to make money through tours and merchandise.
Hipgnosis has spent more than ￡650m ($870m) buying the rights to over 13,000 songs. It now owns a share of eight of the 25 most-played songs of all time on Spotify, a streaming platform, including tunes co-written with Ed Sheeran ("Shape of You") and Justin Bieber("LoveYourself"). In addition to the hits, Mr Mercuriadis also wants to boost returns from songs that have "been leftto languish" by big labels.
Hipgnosis seeks to promote its catalogue by trying to place them in films, TV programmes and streaming playlists. Since it went public in July 2018, the cumulative return on its net asset value is just shy of 40%. Music to investors' ears.