Kobalt Capital sells music royalties portfolio to KKR and Dundee Partners

KKR and Dundee Partners, the Hendel family's investment office, have acquired KMR Music Royalties II portfolio from Kobalt Capital for about $1.1 billion.

KKR and Dundee Partners, the Hendel family’s investment office, have acquired KMR Music Royalties II portfolio from Kobalt Capital for about $1.1 billion. The portfolio is comprised primarily of music publishing copyrights for established works and includes a collection of over 62,000 copyrights by highly acclaimed artists and songwriters across myriad music genres. The portfolio, along with other music rights previously acquired by KKR, will be owned by a newly formed platform, Chord Music Partners.

PRESS RELEASE

NEW YORK – October 19, 2021 – KKR, a leading global investment firm, and Kobalt Capital Limited (“Kobalt Capital” or “KCL”) today announced that KKR, together with its co-invest partner, Dundee Partners, the investment office of the Hendel family, have purchased the KMR Music Royalties II portfolio (“Fund II” or the “Portfolio”) from KCL for approximately $1.1 billion. The Portfolio is comprised primarily of music publishing copyrights for established works and includes a diverse collection of over 62,000 copyrights by highly acclaimed artists and songwriters across Pop, Rock, Dance, Hip Hop, Country and other genres. Kobalt Music Publishing will continue to administer and service the works in Fund II under a multi-year agreement.

The transaction connects the works in the Portfolio with long-term owners who are deeply committed to respecting artists and investing in the longevity and global reach of their music. The transaction has been completed by Chord Music Partners (“Chord”), a platform established by KKR with Dundee Partners. KKR will also contribute other music assets purchased over the past year to Chord, positioning the platform as owner of a diversified portfolio of music rights representing some of the most iconic musical works from the last five decades. Music strategy firm mtheory was instrumental in the development of Chord.

“We are thrilled to purchase this diverse collection of iconic songs. We look forward to investing in the success of this music and working collaboratively with Kobalt and the artists and songwriters who created it,” said Jenny Box, Partner at KKR. “This transaction positions us with significant scale, which we will continue to grow by providing flexible, creative capital to music rights owners. Across KKR, we are investing in innovative technology, media and entertainment businesses that are connecting fans to music in new ways and we are excited about how this can enhance the value and reach of these songs.”

Kobalt Capital Chief Investment Officer and Kobalt Founder & Chairman Willard Ahdritz said: “When we launched Kobalt Capital in 2011, we wanted to work with music we loved and would continue to live on for many decades to come. Our announcement today acknowledges this focus, our predicted market development and the great work we have done at KCL. I am also proud that creators and rights owners put their belief in us to take care of their timeless music and represent it well. We are excited to welcome KKR and Dundee Partners as Kobalt Music clients as the new owners of the Fund II works.”

Kobalt Capital CEO Johan Ahlström added: “This agreement represents a great outcome for our investors and, just as importantly, the ownership of these copyrights will be transferred seamlessly to new investors who share our commitment to putting creators first and being respectful stewards of great music.”

“Kobalt Music Publishing will continue to act as the core administrator and synch licensing partner for the Fund II portfolio,” said Kobalt CEO, Laurent Hubert. “We are excited to work with KKR, Dundee Partners and the many songwriters we have partnered with for years as we continue to deliver market leading service to all stakeholders to grow the reach of the music we all love.”

Today, Kobalt Music represents over 600 publishers, more than 25,000 songwriters and over 700,000 songs. Kobalt will continue to build on its award-winning music publishing business and global digital collection society, AMRA.

KKR has broad experience investing in artist-centric businesses, including household names in the music industry such as Gibson Brands and Alpha Theta (f.k.a. Pioneer DJ), as well as leading digital media and content companies, such as ByteDance (TikTok), Jio Platforms (JioSaavn), Epic Games, OverDrive, RBmedia, ArtList, UFC, Leonine, Next Issue Media and Nielsen.

KKR is investing through its Dislocation Opportunities Fund and certain other private credit investment funds and vehicles. KCL was advised by Russell’s. Music strategy firm mtheory advised KKR and Dundee Partners on the transaction. Latham & Watkins LLP and FTI Consulting advised KKR and DLA Piper, Manatt, Phelps & Phillips, LLP, Jefferies LLC and Inkling Capital, LLC advised Dundee Partners.

About KKR
KKR is a leading global investment firm that offers alternative asset management and capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of The Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.