The Kobalt Music Group, via funds raised by Kobalt Capital Ltd, plans to invest $100 million over the next 12 months in paying advances and buying copyrights.
Through its subsidiary Kobalt Capital, the company raised $75 million in equity from investors, including $12 million from Kobalt Music itself, the company said. Those funds will be used to pay out the bigger advances when needed in going up against the major music publishers. The remainder $25 million, if needed, will come from leveraging the equity by drawing down funding from the company’s credit facilities.
Earlier this year, Kobalt executives said they had $50 million to invest in advances and copyright acquisitions. So far, the company has yet to make acquisitions, but it has invested about $20 million in seven deals, according to company executives.
Kobalt CEO/founder Willard Ahdritz said the company formed an investment advisory firm and raised funds “in order to respond to existing and new clients’ needs for bigger advances, or part or whole acquisitions.”
Until recently, Kobalt has positioned itself as the administrator of publishing rights owned by its artists and songwriters, it now says it can and will buy part or whole copyrights.
“As we enter our second year of activity of KCL we are looking at stepping up our investment in royalty advances and copyrights acquisitions with a focus on rights where value uplift can be achieved through Kobalt’s efficient royalty collections and value enhancement through active management and marketing,” Kobalt Capital CEO Johan Ahlström said in a statement.
