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The one-year anniversary

Round Hill Music Royalty Fund 23 November 2021 Update
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Round Hill Music Royalty Fund

The one-year anniversary

Investment trusts
Special situations – music royalties

23 November 2021

Price

$1.08

Market cap

$356.5m

NAV*

$352.7m

NAV*

$1.07

Premium to NAV*

0.9%

*As at 30 June 2021.

Yield (prospective)

4.5%

Ordinary shares in issue

330.1m

Code/ISIN

RHM/GG00BMXNVC81

Primary exchange

LSE

AIC sector

Specialist – royalties

52-week high/low

$1.08

$1.02

NAV* high/low

$1.07

$0.98

*NAV as reported in the accounts on 31 March 2021.

Net gearing**

109%

**As at 30 June 2021, defined as total assets) less cash to NAV*.

Fund objective

Round Hill Music Royalty Fund’s investment objective is to provide investors with an attractive level of regular and growing income and capital returns from investment primarily in high quality music intellectual property. To achieve this objective, it seeks to invest in a songwriter’s copyright interest in a musical composition or song, together with the rights in the recording of these (known as the master recording rights), along with all other rights and assets considered relevant by the manager.

Bull points

Strong mix of professional music and finance experience in core investment team.

Relatively high predictability of returns.

Prospect of more favourable regulation.

Bear points

Competitive market for assets.

Risk of overpaying for assets.

Regulatory changes may or may not be beneficial.

Analysts

Fiona Orford-Williams

+44 (0)20 3077 5739

Victoria Chernykh

+44 (0)20 3077 5700

Max Hayes

+44 (0)20 3077 5700

Round Hill Music Royalty Fund is a research client of Edison Investment Research Limited

Round Hill Music Royalty Fund (RHMRF) has recently celebrated its one-year anniversary of its launch. It has been very active throughout the year, raising additional funds of $132.6m and acquiring five catalogues. Since launch the company’s NAV returned c 11.1% on a total return (TR) basis (to end-October 2021), within the targeted annualised NAV TR of 9–11%. An increase in economic NAV to $1.07/share (from $0.98 per share at launch; not an IFRS measure) and two dividends contributed to the NAV TR. RHMRF benefits from the industry expertise of its fund manager Round Hill, a fully integrated business, in owning and exploiting music copyright assets. We believe RHMRF’s assets will continue to expand, providing reliable and growing revenues given the momentum in streaming and the potential of new distribution channels.

RHMRF’s total return since launch (%)

Source: Refinitiv, RHMRF

Why invest in RHMRF now

The value inherent in music assets has been highlighted in H221 so far, by several important events and transactions, the largest being the flotation of Universal Music Group, spun out of Vivendi. There has also been a substantial flow of private equity funding into music assets, with KKR, Apollo Global Management and Blackstone each injecting over $1bn. A continuing flow of substantive catalogue transactions implies a healthy market, with high-quality portfolios, such as that managed by RHMRF, achieving reportedly good valuations, although, as ever, pricing details are confidential.

The analyst’s view

In our view, RHMRF has compiled a strong portfolio of assets through its purchases of the Round Hill Fund One assets, an interest in the Carlin portfolio and further five 2021 catalogue acquisitions. We regard the prices paid for the seed portfolio in February and April 2021, see Exhibit 1, as appropriate for the underlying asset quality, which is mature and well diversified by genre. RHMRF’s revenues are set for strong growth, driven by the popularity of streaming (21% of the portfolio at end-June 2021), newer formats such as social media, gaming and fitness, and potential favourable regulatory changes (see our initiation report for details). The manager Round Hill has generated a historical internal rate of return of over 17% (over the past 10 years) on its three private funds.

Fund profile: High-quality music royalties specialist

RHMRF listed on the London Stock Exchange on 13 November 2020, with the IPO raising $276.4m. It is the second UK-listed closed-end fund investing in music royalties (following Hipgnosis Song, SONG, listed in July 2018). Its NAV is $319.31m (as reported in the accounts on 30 June 2021) and the market capitalisation is $356.5m. The economic NAV (see the NAV reporting and sensitivities section below) is $352.65m based on audited $1.07 economic NAV per share at 30 June 2021). A secondary fund-raise in December 2020 raised $46.1m net (46.1m shares at $1.01) and in July 2021 the fund raised a further $86.5m in a ‘C’ share issue. Both raises were within its placing programme.

The company seeks to invest in music royalties with a proven track record and wide audience appeal. Exhibit 1 below summarises RHMRF’s catalogue acquisitions to date.

Exhibit 1: RHMRF’s acquisitions since launch

Date

RHM's name for the catalogue

Number of catalogues

Number of songs

Value ($m)

NPS multiple

Generated revenues prior to acquisition ($m)

1-Feb-21

Assets of Round Hill Fund One

38

>18,000

282

16.3x

>38m

4-May-21

29.14% minority investment in the RH Carlin portfolio

1

>100,000

c 40

16.2x

Undisclosed

11-Aug-21

Trevor Rabin

1

3,520

Undisclosed*

Undisclosed*

Undisclosed*

9-Sep-21

Dennis Elliott

1

71

Undisclosed*

Undisclosed*

Undisclosed*

15-Sep-21

Tim Palmer

1

30

Undisclosed*

Undisclosed*

Undisclosed*

28-Sep-21

O'Jays

1

532

Undisclosed*

Undisclosed*

Undisclosed*

2-Nov-21

Supertramp admin

1

39

Undisclosed*

Undisclosed*

Undisclosed*

Source: RHMRF. Note: *Due to commercial sensitivities, the company is unable to disclose financial details for each acquisition as it occurs. However, on completion of the investment of proceeds from the C Share fundraise of $86.5m, together with the remaining undrawn balance of its existing revolving credit facility, the company will make further financial disclosure on the acquisitions.

Further details of the investments are given below.

RHMRF targets an annualised TR to investors of 9–11% over the medium term, after fees and expenses. It also targets a 4.5 cents per share annualised dividend payment, payable quarterly.

NAV reporting and sensitivities

The IFRS NAV per share was $0.97 at 30 June 2021. An independent valuer, Massarsky Consulting, valued RHMRF’s portfolio at $1.07 audited economic NAV per share (30 June 2021), using a 8.5% discount rate (50bp down from 30 June 2020’s valuation 12 months earlier). As stated in the H121 company’s report, the RHMRF’s board believes an economic NAV provides a meaningful alternative performance measure. The directors note the values of catalogues owned directly by RHMRF are based on fair values produced by the portfolio independent valuer. The company floated at $0.98 economic NAV per share.

Massarsky also valued the Hipgnosis portfolio at 31 March 2021 using an 8.5% rate (unchanged from its previous valuation six months earlier, but 50bp down on 31 March 2020 rate).

The key factors in music royalties’ valuation models are:

royalty revenues growth rates;

the discount rate used in valuation;

the valuation time horizon; and

the terminal value assumed.

RHMRF intends to publish NAVs twice per year within its reports. Under IFRS, the songs in the company’s portfolio are classified as intangible assets under IAS 38. The catalogues are held at cost and amortised over their useful life (which is determined at acquisition), less any impairment. The directors also disclose the fair value of the portfolio of songs as determined by the independent valuer, Massarsky, using a discounted cash flow. This portfolio valuation forms the basis of what RHMRF calls the ‘economic NAV’ (Hipgnosis calls this measure ‘operative NAV’). We note that ‘economic NAV’ might differ from the portfolio value, as amortised cost has been used in the IFRS NAV in the accounts.

Team changes

On 5 November 2021 RHMRF announced that Neil Gillis, who is Round Hill’s president, has decided to retire from full-time employment at Round Hill Music when his contract expires on 28 February 2022, to allow him time to take up producing and teaching music. Over the past year, there has been a gradual transition of operational oversight within the investment manager from Neil to Steve Clark, who joined Round Hill as global chief operating officer from Warner Chappell Music in August 2020. Based in the UK, Steve is a highly respected industry figure, having been at Warner Music for over 20 years and sitting on several industry bodies.

Industry profile raised further

The rate of music industry portfolio and rights deal flow has remained strong over recent months, with the volume of deals encouraging other rights’ owners to evaluate their options to release value from their work.

From an investment perspective, the attraction of the quality and the quantum of revenue streams has been further validated by significant sums of private equity funding coming into the market. Particularly noteworthy are investments by:

KKR and Dundee Partners of $1.1bn, buying KMR Music Royalties II portfolio, consisting of 62k copyrights.

Blackstone, seeding a new private fund to be managed by Hipgnosis with $1bn.

Apollo Global Management investing $1bn into a new venture, HarbourView, to be focused on music rights and media content and headed up by the former head of Tempo Music Investments.

In the quoted arena, the IPO of Universal Music Group on Euronext in September has also drawn close attention to the valuation of music assets. The group is valued at €47.3bn ($53.4bn), with the post IPO performance also benefiting other music-related stocks’ share prices, including Believe (BLV, mkt cap: €1.9bn/$2.1bn) and Warner Music Group (NASDAQ: WMG, mkt cap $23.3bn).

Portfolio

Acquisitions

Since our last report, the group has announced five acquisitions of music publishing catalogues, master royalty income, recorded music income, neighbouring rights and publishing rights (for definitions, please see our initiation report) using the $86.5m of funds raised in the C Share issue. These comprise:

August 2021: 3,528 film cues and songs by Trevor Rabin, best known for his time with the band Yes. This an open market purchase and includes the scores to over 40 films. Round Hill Music’s interest is 50%.

September 2021: master royalty rights to the first seven albums (71 songs) by Foreigner from their original drummer, Dennis Elliott (Round Hill Music interest 100%)

September 2021: 30-song catalogue from Tim Palmer, recorded music income and publishing rights. This includes 100% of the mixer royalty income for Pearl Jam’s album, Ten; 100% producer income of master recording rights for Ozzie Osbourne album, Down to Earth, plus 100% of the publishing interest in six of the 11 songs on that album.

September 2021: 100% master royalty income of 532 original recordings from the O’Jays. Streaming generated 64% of revenue across FY18–20.

November 2021: 100% of neighbouring rights to 39 original recordings from three longstanding members of Supertramp, which obviously fit well with the fund objectives.

In February 2021, RHMRF completed the acquisition of its first investment, which consisted of the assets of Round Hill Fund One, less the 29.14% minority investment in the RH Carlin portfolio. These assets were bought for $282m, the amount of the IPO proceeds (86% of the IPO proceeds plus December 2020 raise). The Carlin minority was subsequently purchased shortly after, in April 2021. The majority ownership (70.86%) of Carlin rests with Round Hill Fund Two and a Carlin co-investment vehicle (see the Investment manager section on page 3). At the time of the second acquisition, RHMRF announced it had entered a revolving credit facility with trust, allowing it to draw up to 25% of the fund’s economic value, which part funded the Carlin purchase.

The first investment consists of 38 catalogues, containing over 18k songs, purchased at 16.3x net publisher’s share (NPS). This catalogue had generated revenues of over $83m before its purchase.

The second investment (the Carlin minority investment) consists of over 100k songs in one catalogue, bought at 16.2x NPS.

Further pipeline assets

Given RHMRF’s recent acquisitions, the July 2021 ‘C’ share equity raise of $86.5m gross proceeds and the company’s pipeline of c $300m in estimated acquisition value (at end-June 2021), we estimate the current pipeline is worth over $200m (at end-October 2021). Round Hill Music has also seen significant deal flow emerge from within its existing catalogues (including the pipeline investments) and has a proprietary position on those deals.

Current portfolio positioning

RHMRF’s portfolio has 39 catalogues with over 118,000 songs (at end-June 2021). Exhibits 2 and 3 illustrate the portfolio is diversified by genre and revenue type. ‘Older’ genre rock (41%) has the largest share, followed by pop (24%) and country (13%). Following the investment manager’s ‘high quality compositions’ approach to primarily acquire songs over 10 years old, more than 75% of all the songs in the portfolio are ‘vintage’, written before 2000. The portfolio is also diversified by revenue type, with a quarter of the portfolio’s revenues in masters’ royalties (Exhibit 3).

Exhibit 2: Portfolio breakdown by genre, Jun 21

Exhibit 3: Portfolio breakdown by revenue type, Jun 21

Source: RHM

Source: RHM

Exhibit 2: Portfolio breakdown by genre, Jun 21

Source: RHM

Exhibit 3: Portfolio breakdown by revenue type, Jun 21

Source: RHM

Performance: Trading since 13 November 2020

RHMRF’s performance track record began on 13 November 2020, the first day of trading of the trust. RHMRF’s share price is shown in absolute terms in the left-hand chart and in relative terms in the right-hand chart of Exhibit 4, compared to the MSCI UK All Cap Index.

Exhibit 4: Investment trust performance to 31 October 2021

Share price total return performance

Price, NAV and benchmark total return performance (%)

Source: Refinitiv. Note: Three-, five- and 10-year performance figures annualised.

A comparison of RHMRF’s and SONG’s performance is presented in Exhibit 5.

Exhibit 5: Selected peer group as at 31 October 2021*

% unless stated

Market cap £m

NAV TR
1 year

NAV TR
3 year

NAV TR
5 year

Sl** of RHM

Prem/disc
(cum-fair)

Ongoing charge

Perf.
fee

Net
gearing

Dividend
yield

Round Hill Music Royalty

263.8

5.6

1.2

0.7***

Yes

109

4.5

Hipgnosis Songs

1,545.5

(0.1)

38.1

(1.2)

0.7

1.6

Yes

133

4.1

Simple average (2 funds)

904.7

(0.1)

38.1

N/A

2.2

1.0

1.1

121

4.3

RHM rank in peer group

2

N/A

N/A

N/A

N/A

1

N/A

2

1

Source: Morningstar, Edison Investment Research. Note: *Performance based on cum-fair NAV. **Sl = since launch. ***Edison’s estimate from launch to end-June 2021, including outstanding fees. TR = total return. Net gearing is total assets less cash and equivalents as a percentage of net assets, and in the case of funds investing directly in operating assets, does not include gearing at the underlying asset level.

RHMRF has the lower market capitalisation of the two funds. Both RHMRF’s and SONG’s track records are relatively short, with SONG launched on 11 July 2018, approaching its three-year anniversary. In performance terms, since launch RHMRF has outperformed SONG on a NAV total return basis, but we note the very short performance period of around one year. It is typical for new funds to gain momentum over a year as they establish themselves, invest and begin harvesting IPO proceeds, as RHMRF has done. This period largely reflects the set-up stage for RHMRF, as it has now fully invested its IPO proceeds and geared up.

In terms of the premium/discount to NAV, we believe it is still too early to compare the two trusts, and the numbers in the premium/discount column in Exhibit 5 are indicative only. We note that SONG reported its latest economic (or operative) NAV per share ($1.7) on 31 March 2021, and RHMRF’s first post-launch reported economic NAV per share was $1.07 at 30 June 2021.

Dividends and dividend policy

RHMRF’s primary objective is to reward its investors with a stable income (it also aims for long-term growth of capital). In the H121 report, the board confirmed the 4.5% dividend yield target for the financial period to 31 December 2021. This is in line with RHM’s long-term annualised dividend yield target of 4.5%, by reference to the issue price of $1.0.

The company has declared and paid two interim dividends so far in FY21, totalling $0.01875. The first interim dividend of $0.0075 was declared in May and paid in June 2021, and the second of $0.0125 was declared in August and paid in September 2021. According to RHMRF, these interim dividends were covered by income in the extended H121 period since launch to 30 June 2021.

The dividend policy is to pay dividends quarterly: declare dividends for the quarterly periods ending March, June, September and December and pay in June, September, December and March respectively. Dividends are aimed to be paid out of royalties income, but can be paid out of capital, if necessary, within the dividend policy.

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This report has been commissioned by Premier Miton Global Renewables Trust and prepared and issued by Edison, in consideration of a fee payable by Premier Miton Global Renewables Trust. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

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General disclaimer and copyright

This report has been commissioned by Premier Miton Global Renewables Trust and prepared and issued by Edison, in consideration of a fee payable by Premier Miton Global Renewables Trust. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

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Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

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United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Round Hill Music Royalty Fund and prepared and issued by Edison, in consideration of a fee payable by Round Hill Music Royalty Fund. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Round Hill Music Royalty Fund and prepared and issued by Edison, in consideration of a fee payable by Round Hill Music Royalty Fund. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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