(Bloomberg) -- After selling his last company, Songs Music Publishing, for about $160 million, Matt Pincus started making new deals across the record industry. The more he did, the more he realized there were few companies focused solely on music investments. So he started another one.
Pincus is announcing Thursday that he has raised about $200 million from Jonathan Soros, Schusterman Family Investments and the investment bank LionTree LLC to create a new company that will invest exclusively in music assets. That sum includes money he’s putting in the business, which is called Music.
Investments in the industry have soared in recent years, with streaming services like Spotify Technology SA propelling revenue to new highs. Two of the three major record companies listed shares publicly in the last two years, and catalogs for acts like Bob Dylan and Sting have sold for hundreds of millions of dollars. But many of those assets reside in diverse funds, overseen by managers with no particular expertise in music.
“I really wanted to build an investment company that is only focused on music,” said Pincus, 49. “I didn’t just want to work for a private equity firm.”
Pincus plans to invest about $25 million per deal in companies in music technology, artist management and infrastructure, taking a minority stake and sitting on the board. He will also take part in larger deals for music catalogs and record companies with private equity firms and look for early-stage companies.
The veteran music executive said he’ll be free to make deals without the approval of his investors, and has no set timeline. He wants to be able to stay in a holding for as many years as needed. He sold Songs after 15 years.
Pincus predicts music valuations will slow or soften, due to rising interest rates and fear of a recession. This plays to his strengths, he said, provided the entire market doesn’t melt down.
The son of legendary private equity executive Lionel Pincus, Matt Pincus brings a rare combination of hands-on industry experience and financial expertise. He came of age in New York’s music scene before enrolling in business school. He went on to work at the music company EMI.
Pincus started Songs Music Publishing in 2004 and signed acts like The Weeknd, Lorde and Diplo.
Pincus met LionTree Chief Executive Officer Aryeh Bourkoff while selling Songs, and joined the investment banking company as an executive-in-residence after completing the sale of the company to Kobalt Music. Pincus helped LionTree build its music practice and made several investments of his own.
“Matt’s independence, track record, and the relationships he’s built across the ecosystem give him a unique perspective on where music is headed,” Bourkoff said in a statement.
The new company may invest in some song catalogs, but Music will be more focused on the companies powering the modern music business.
Pincus has already made similar deals on his own. He is one of the largest investors in Splice, a music-creation platform, and HIFI, a financial-services firm for the industry. Those investments will remain separate from this fund.
“I’ve done this three or four times now, and a couple of them went well,” he said.
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