The classical music publisher Boosey & Hawkes is the latest addition to the ABP pension fund's programme of direct investment in assets, rather than fare the volatility of the public markets.
Under the £126m deal announced yesterday, the British company, which controls the rights to world-famous composers including Sergei Rachmaninoff and Benjamin Britten, will be sold to Imagem Music. Imagem was set up by the Netherlands-based ABP, the world's third-largest pension fund, and CP Masters, an independent music publisher, earlier this year.
Boosey & Hawkes, which has more than 116,000 works of music and dance on its books, is Imagem's second major deal, following the acquisition of a number of music catalogues from Universal Music Group in February.
ABP, which has €217bn (£174bn) under management and 2.7 million participants from across the Dutch government and education sectors, is one of the few pension funds investing directly in companies rather than buying shares or bonds.
"Music publishing, and classical in particular, is an incredibly stable business," said Richard Madden, the managing director of Close Brothers. "It is growing nicely, because of its demographic – which is people who are wealthier, older and more inclined to listen – so it is a very attractive proposition and a perfect match with long-term pension liabilities."
Although there are a number of mid-level independent music publishers, previous attempts to build large businesses have foundered owing to problems accessing sufficient capital to bid for catalogues against the industry giants. "The tie-up with ABP is good for CP Masters because it is a stable and supportive shareholder who is prepared to make acquisitions," Mr Madden added.
Since Boosey & Hawkes was sold for £75m five years ago to the private equity group HgCapital, it has more than doubled its earnings to £6.8m and completed six acquisitions which took it into new areas such as tango and jazz.
The Boosey & Hawkes chief executive, John Finch, said: "HgCapital has been a tremendous owner. In 2003, Boosey & Hawkes was in some difficulties as a public company, and going private enabled us to make the radical changes necessary for the survival of the business.
"Imagem Music promises to be a highly supportive long-term owner that can reap steady and predictable financial benefits from our world-class music portfolio."Reuse content