It was a good idea: capitalise on the booming interest in “alternative” asset classes and launch a quoted fund to buy music rights. The bulk of the royalty income would flow to shareholders as dividends. Every addition of a new back catalogue would bring diversity to the portfolio. Thus Hipgnosis Songs Fund debuted on the London stock market at 100p a share in 2018, with music industry veteran Merck Mercuriadis setting the beat as the deal-doing investment adviser. For a while, progress was harmonious. Shareholders were tapped regularly to fund purchases of the back catalogues of the likes of Blondie, Red Hot Chili Peppers and Neil Young. The share price peaked at 129p in late 2021. Since then, though, it’s been downhill fast, to the point where the gap between the fund’s view of the worth of the assets – or, rather, the external valuer’s view – and the share price is huge. The official value is 150p-ish versus 65p in the market. There are reasons: outsiders’ distrust of the valuation model; a feeling that …

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