Investec issues 'buy' recommendation for Hipgnosis after 'transformational' year

Positive on future of sector

Investec has initiated a ‘buy’ recommendation on the Hipgnosis Songs fund, which has grown from £202m at IPO in July 2018 to a market cap of over £1.2bn.

In a note on the fund, Investec said 2020 has been "a transformational year" as Hipgnosis raised £420m in two separate fundraisings in August and September. "In recent years, the growth in paid music streaming has transformed the industry from one of structural decline, caused by rampant piracy, to one of structural high growth," analysts Ben Newell and Alan Brierley wrote. "The recorded music industry has demonstrated five consecutive years of growth as numbers of paid streaming subscribers have increased year-on-year and we believe that this trend is likely to continue as digital se...