The private equity group Blackstone has announced it has acquired the back catalogue of pop singer Justin Timberlake in a deal estimated to be worth around $100 million. The purchase is the latest in a growing line of back catalogue sales despite some commentators had previously predicted that the market was cooling.
During the COVID-19 pandemic, a very lucrative market emerged for established musicians selling off the rights to their entire back catalogues. American rock icon’s Bob Dylan and Bruce Springstein both agreed bumper deals in order to “secure their legacy” or provide them with a tax free pension depending on one’s perspective.
The Timberlake acquisition was undertaken by Blackstone in partnership with Hipgnosis – a private fund formed back in October 2021 with an estimated funding of $1 billion solely to acquire musicians back catalogues.
Blackstone achieved a degree of infamy during the last few years and have been dubbed “the company that owns the world” by some and there is no denying that they have created a pretty expansive and far reaching portfolio of interests.
We shall now take a look at 10 other notable Blackstone backed investments from the last 12 months.
In March 2022 London based digital foregn exchange company Currencies Direct secured backing from Blackstone worth an estimated £140 million in order for them to explore acquisition options. In exchange for the finding, Blackstone earned a seat on the Currencies Direct board although majority control still resides with CEO Keith Hatton who was quoted as saying “This investment will help fuel our growth as we build on our significant momentum.
Whilst Currencies Direct rates are amongst the more competitive player active in the buoyant forex market place, it seems that they may have decided that they no longer want to compete with the competition and would instead just prefer to own it!
Crown Resorts Ltd
In June 2022, the Western Australian independent casino regulation authority approved Blackstones $6.3 billion buy out of Crown Resorts Ltd. Whilst the approval has been issued subject to a number of strict conditions, the move has already been approved by both the New Sales Wales and Victoria state regulators and as such completion now seems very likely.
Crown Resorts Ltd is 37% owned by billionaire James Packer and has been under pressure ever since it was found to have been enabling money laundering.
Canadian Real Estate
Blackstone is already deeply invested in the US, Asian and European Real Estate markets and has now opened its first physical real estate office in Toronto Canada. At this stage it is not clear what Blackstones strategy for Canada is but has announced Janice Lin, formerly CIO at Rivera to head up the business.
Critics have questioned whether the already inflated Canadian Real Estate market can withstand much more corporate speculation but Blackstone defended the move. “We have spent a lot of time in Canada over the years and now is the time to have a senior member on the ground in the country,” a Blackstone spokesperson was quoted as saying.
Whereas the widely held view is that print is dead, and the smart money is online, Blackstone would seemingly care to disagree. After previously investing in celebrity publishing projects like Will and Jada Smith’s Westbrook Studios and Reese Witherspoon’s Hello Sunshine, Blackstne has recently led a £300 million round of fundraising for Recurrent Ventures who publish popular titles such as Popular Science and Task and Purpose.
Big pharma is serious business and so it should come as no surprise to see Blackstone embedding themselves even deeper in the industry. Advarra works with pharmaceutical companies and regulators to validate research and help bring new drugs to market.
The Blackstone deal values Advarra at around $5 billion which tops off a very successful few trading years which saw Advarra work with the Trump administration to bring COVID-19 vaccines to market.
We have already covered how the opening of Blackstones Toronto office signals their entry into the Canadian Real Estate market but that does not mean they have forgotten about the US. In May, Blackstone announced the $3.75 billion acquisition of the real estate management company Resource REIT.
Resource REIT is a real estate investment trust that boasts a diverse portfolio of apartment communities in targeted markets – they currently own 42 multi-family properties spread across 13 different US states.
OK so this is not strictly a new investment for Blackstone but rather represents an important update on a previous one. Anyway, back in 2013 Blackstone acquired the Milan office and headquarters of Italian media company RCS Mediagroup for $128 million during a period where RCS were facing financial difficulty.
After recovering from their difficulties RCS initiated legal proceedings in 2018 to try and nullify the sale and return ownership to them. However an arbitration tribunal found in Blacktones favour and dismissed the application to overturn the sale. Blackstone is now seeking a hefty $600 million in damages.
Private Credit in Europe
The private credit movement is slowly gathering pace in the European assessment space and now Blackstone has announced its intention to throw its considerable weight into the sector. Whilst the value of the fund they will make available is currently now known, the firm has secured regulatory approval in Luxembourg.
Private Credit is widely seen as a vital step in enabling funding for individual investors in the European region – investors who had previously kept out of the market.
According to sources close to Blackstone, they intend to run it as a “perpetual fund” that allows investors to deposit and withdraw their money with enhanced flexibility – whilst perpetual funds have proven popular in the USm they are well established in Europe.
Back in January, the Blackstone Group announced it was setting up a fund with a view to investing $100 billion in renewable energy. For some time now the group has been looking to move into the renewable energy space – indeed, it is estimated that $100 trillion of investments are going to be needed by 2050 in order to decarbonise the global economy and offset the impending climate catastrophe.
The Global Head of Blackstone Credit Dwight Scott said of the announcement: “Blackstone Credit’s unmatched scale is being unleashed to support companies that are driving the energy transition”. However, critics have pointed out that $100 billion is still only a fraction of how much the group has invested in gas, oil and fossil fuels in recent decades and that much higher investment is needed if the group seriously wants to position themselves as champions of sustainability.
From 90’s pop stars to future-fuels, Blackstone certainly are going out of their way to diversify their investments. Of course this makes perfect sense, the world is rapidly changing and the media, cultural and geo-political landscape is shifting fast but Blackstone appear to have well and truly hedged their bets.