Power Amp Music, the venture capital, investment advisory and marketing firm, have launched the Power Amp Music Fund, a tax-efficient investment vehicle offering the opportunity to invest in a diversified portfolio of UK music talent, capitalising on the rapidly changing face of the music industry.
The fund is seeking to raise 10 million as an Approved Investment Fund under the Enterprise Investment Scheme (EIS) in order to develop a total of between 20-30 artists, ranging from emerging artists through to established and “heritage” artists.
The music management team is fronted by industry figurehead Jazz Summers, known for his management of artists including The Verve, Snow Patrol and WHAM!
“This venture could not have launched at a better time the UK music scene is booming and the industry has been laying waiting for an egalitarian but profitable music enterprise,” says Jazz Summers, music manager, Power Amp Music.
The Power Amp Music model completely aligns the needs of the artists and investors. The artists are placed at the centre of the model and have the flexibility to develop their careers in the most appropriate and profitable ways. By investing directly in artists’ careers, investors participate in all revenues available to artists: recording; publishing; live; merchandising; and any future revenues. Investors are protected from declining CD sales by the growth seen in all other revenue streams.
Power Amp Music aims to generate capital gains through the production and promotion of new music and to provide investors with the tax advantages associated with EIS investments. The fund targets a blend of emerging and established acts and launches with the signing of hotly-tipped new band, Mancini.
The fund seeks to identify and engage with the UK’s most talented artists via specially formed music development companies. These companies are directed by Power Amp Music and provide development services to the artists, including: recording; production; promotion; advertising; distribution; touring; artwork/design; merchandising; sponsorship; and publishing.
“The music market is undergoing a fundamental shift and the commotion taking place at EMI is symptomatic of a wider malaise as the major labels try to stop the rot. The industry was slow to react to the digital age and now we are seeing it fail to adapt its overall business model to combine artists’ needs and interests with wider profitability.
“The industry has changed irrevocably and the hegemony major labels have long exerted over artists is crumbling. Our artists will have control of their own destinies and total transparency of their finances, but most importantly they retain control over how their copyrights are used.
“We have recognised the opportunities created by the changing industry and established a robust, flexible and cost-effective development model to capitalise on artists growing demand for alternative financing solutions. The Fund offers an extremely effective route into an industry with particularly strong revenue potential providing an excellent win-win opportunity for investors and artists alike.
“Several music funds have been successfully issued in recent years but ours is the only sector specific EIS Fund currently offering a direct investment route into music development, and is the only one to employ what we are calling the ‘artist-centric model’.
“The interest we have had from artists has been fantastic and the first on our roster is Mancini who people will have seen on the MobileAct show on Channel 4. Further band announcements are just around the corner,” says Tom Bywater, managing director and senior investment manager, Power Amp Music.