A well-funded new player just entered the music rights acquisition space.
Music industry veterans Hank Forsyth and Dan McCarroll are teaming up with Carlyle Global Credit to launch a venture called Litmus Music.
New York-based Litmus says that it will focus on acquiring and managing both publishing and recorded music rights, with Carlyle Global Credit committing an initial $500 million to do so.
Carlyle Global Credit, which has $143 billion in assets under management, is investing capital into Litmus from what it calls its “Credit Opportunities strategy”, which, it says, has already deployed $2.2 billion in and around the media and entertainment space since 2018.
Carlyle Global Credit is one of three platforms (alongside Global Private Equity and Global Investment Solutions), operated by investment firm Carlyle, which had $376 billion of assets under management as of June 30, 2022.
In a press release announcing the news, Litmus says it will “acquire and manage music rights, including both music publishing and recorded music, across genres, geographies and vintages”.
According to the release, Carlyle Global Credit’s initial commitment of $500 million will be in both equity and debt, alongside “capital committed by management”, which it says will be used to launch the business and “fund the pursuit of a robust pipeline of music rights targets”.
Carlyle was previously an investor in Scooter Braun’s Ithaca Holdings, prior to its $1 billion acquisition by HYBE in February last year. Carlyle exited its position in the acquired company.
Litmus Music enters a rights acquisitions landscape already occupied by players like Primary Wave, Hipgnosis Songs Fund, HarbourView Equity Partners, and Influence Media Partners.
Also competing in the space are the likes of BMG and KKR, while the major music companies have also made notable rights acquisitions in recent months. Such acquisitions include the likes of Bruce Springsteen’s catalog sale to Sony Music Group in December, Warner Music Group‘s David Bowie song catalog acquisition in January, and Sting’s song catalog sale to Universal Music Group in February.
Litmus says that its founding members bring significant music industry experience to the space.
Hank Forsyth has held various executive roles at Warner Chappell Music, EMI Music, and Blue Note Records over the last 20 years.
At Warner Chappell, as EVP, he worked closely with the team to develop the Company’s strategy and led business and process initiatives globally.
As the GM of Blue Note, he is said to have played a central role in revitalizing the label in partnership with its President, Don Was. Forsyth previously spent more than 10 years with EMI Group and EMI Music Publishing in operations and strategy.
He began his career as an equity analyst at Salomon Brothers and Donaldson, Lufkin & Jenrette in New York and London.
Dan McCarroll, meanwhile, has served as President of Warner Brothers Records and Capitol Records and has held executive roles at Amazon Music and EMI Music Publishing.
Prior to his executive career, he spent 20 years as a touring and studio musician.
He has worked closely with artists throughout the years including Bo Diddly, Katy Perry, Tom Petty, Keith Urban, Dua Lipa, Duran Duran, Elton John, Ciara, Sheryl Crow, Mac Miller, Andra Day, Lloyd Cole, Sam Smith, Stevie Nicks, Gary Clark Jr., and Brian Wilson.
“Music is as important in society as it has ever been, and its impact and value are being felt more and more.”
Hank Forsyth, Litmus
Hank Forsyth, Co-Founder and Chief Executive Officer of Litmus, said: “Music is as important in society as it has ever been, and its impact and value are being felt more and more.
“It is an honor to partner with Dan and form what we have talked about for years – a music business and team built on integrity and trust.
“These core Litmus values are shared by Carlyle, and we believe they are the best partners to support our team as we start this journey.”
“Music has been the driving force of my life and I have the greatest respect for the writers and artists who make it and the fans who cherish it.”
Dan McCarroll, Litmus
Dan McCarroll, Co-Founder and Chief Creative Officer of Litmus, said: “Music has been the driving force of my life and I have the greatest respect for the writers and artists who make it and the fans who cherish it.
“It is thrilling to be starting Litmus with the partnership of Hank and Carlyle. Our incredible team is all about collaboration and building a collection of ageless music assets and unforgettable songs that will continue to enrich people’s lives for years to come.”
“Our partnership with Hank and Dan, two highly regarded executives in the music industry, underscores the value we see in music rights, driven by strong tailwinds and the uncorrelated nature of the asset class.”
Matt Settle, Carlyle Global Credit
Matt Settle, Managing Director with Carlyle Global Credit, said: “Our partnership with Hank and Dan, two highly regarded executives in the music industry, underscores the value we see in music rights, driven by strong tailwinds and the uncorrelated nature of the asset class.
“Streaming and other new mediums have enabled more ways than ever to consume content, and we believe Litmus has the right mix of skills, experience and connectivity to develop a successful and differentiated business, and to care for works that people have spent their lifetimes creating.”Music Business Worldwide