Sweet dreams are made of hits for investors snapping up back catalogues

Potential long-term income from songs by hit-makers such as Eurythmics, Beyoncé and Mariah Carey has piqued the interest of institutional investors, leading to a wave of deals this year for the back catalogues of proven artists.

Last month the Singaporean sovereign wealth fund GIC and Sony Music Publishing paid a reported $4bn (£3bn) in a joint venture to buy a catalogue of 45,000 songs from Blackstone’s Recognition Music Group. They included Eurythmics’s Sweet Dreams (Are Made of This), Carey’s All I Want for Christmas Is You and Beyoncé’s Single Ladies (Put a Ring on It).

In the same month, the world’s largest record label, Universal Music Group, rebuffed a takeover offer from Pershing Square Capital Management, Bill Ackman’s investment firm, which would have valued the label and its back catalogue at $64bn. Universal’s imprints represent everyone from Justin Bieber and Jay-Z to the Rolling Stones and the Jam. Pershing last week sold its stake in Universal, sending the label’s shares down 7%.

In April, music giants BMG and Concord announced a merger that left the US-based investment giant Great Mountain Partners with 33% of the company – and a stake in the rights to the works of artists including Paul Simon, REM and will.i.am.

There is particular interest in the work of older artists thanks to the rise of streaming platforms such as Spotify, whose data reveals just how dependable their returns are, said Nicole Magoon, leader in Bain & Company’s media and entertainment practice. “For those really big, proven catalogues, it’s become pretty predictable in terms of what you can get out of streaming,” she said.

Magoon added that canny investors can do more than just sit on these assets and wait for royalties. The Swedish music investor Pophouse Entertainment, founded in 2014 by Abba member Björn Ulvaeus, has used its rights to Ulvaeus’s music to generate extra returns through its Abba Voyage experience. The show has drawn more than three million visitors since it launched in 2022. Pophouse has also bought the back catalogues, names, images and likeness rights of Kiss and Tina Turner.

“Fans are, we think, undermonetised in music,” said Magoon. “There’s more you can do in terms of wraparound fandom. That’s all upside, on top of the streaming you can get.”

Potential income from artificial intelligence has also led to an increase in deals. Last month Spotify and Universal agreed a deal that will allow the streaming platform’s subscribers to create their own song covers and remixes, which Spotify claimed could generate new income streams for artists (and the owners of the rights to their work). Last week the AI startup Suno, which allows users to generate their own songs through prompts, raised $400m, valuing it at $5.4bn.

“Catalogues have matured into a highly sought-after mainstream asset class,” said Scott Purdy, US media industry leader at KPMG. He expects a “wave of mid-market catalogue sales, mirroring trends seen in sports franchise acquisitions”.

However, while investors’ enthusiasm for catalogues appears healthy, their interest in the UK’s music technology sector is waning. A report this month from Music Technology UK showed funding for growth-stage music technology startups fell by 90% between 2020 and 2025, from £101m to £10m.

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