FTSE 250 music royalty investor Hipgnosis Songs Fund (SONG) is  to get another listed rival in mid-November as Round Hill Music plans to float an investment trust on the London Stock Exchange.

Both companies generate an income through owning the rights to various songs, collecting royalty payments when they are streamed or purchased digitally, on vinyl or CD, feature in films, TV shows and adverts, as well as being played on stage, in shops, restaurants or gyms.

Round Hill hopes its trust will deliver 9% to 11% annual total return for investors including a 4.5% dividend yield.

It plans to raise $375 million to buy various catalogues of songs already owned by another Round Hill fund. They include songs by The Beatles as well as classics such as What A Wonderful World, Santa Baby and Total Eclipse of  the Heart.

Round Hill says these catalogues mainly feature older songs that have ‘reached a steady state of earnings and are stabilised and not subject to the natural decline in earnings and value that typically occurs within the initial 10 years of a composition’s life.’

Hipgnosis recently said its pipeline of acquisitions was also focused on older songs. It has previously come under criticism for relying too much on recent hits whose durability in terms of being able to generate royalties long-term is untested.

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