Hipgnosis Songs Fund has suffered a hit to the value of its portfolio following an independent valuation as part of the trust’s strategic review.
The appraisal, carried out by Shot Tower Capital, placed the fair market value of the music royalty trust’s portfolio at between $1.8bn (£1.42bn) and $2bn at 1 March.
This compares to the $2.62bn valuation at 30 September last year. The new valuation places NAV per share at $1.17, down from $1.74 at the end of September.
As a result, the trust’s board said in a stock exchange announcement this morning (4 March) that it will reduce gearing and will not recommence dividends for the ‘foreseeable’ future.
Robert Naylor, chair of Hipgnosis Songs Fund, said: “The newly constituted board is making good progress with the due diligence work that will underpin its strategic review.
“We are disclosing the valuation at this time given its material difference to valuations previously disclosed. The board will provide further detail on this when the due diligence is complete. The board remains focused on identifying all options to deliver shareholder value.”
The board said that in its interim results, it had stated there were multiple transactions within the broader market that came at a material discount to the fair value of its assets at the time.
Hipgnosis added it had sought advice from investment adviser Hipgnosis Songs Management, who the board said had at first declined to give an opinion but after “repeated” requests, provided an opinion which was “heavily caveated”.
