Primary Wave Music just got a major cash injection. The company has finalized what it calls a “strategic relationship” with funds managed by Oaktree Capital Management. Oaktree Capital has committed to invest up to $375 million into Primary Wave Music in exchange for a minority interest in the music company. Primary Wave has raised over $800m in the past four years via two IP funds: a $300m fund in 2016, backed by Black Rock, and a further $500m-plus fund launched last year.
As such, today Primary Wave owns substantial interests in the song catalogs of icons such as Ray Charles, Bob Marley, Whitney Houston, Burt Bacharach, Smokey Robinson, the Four Seasons, and Fleetwood Mac’s Stevie Nicks. In November last year, speaking on the MBW Podcast, Primary Wave’s Founder & CEO Larry Mestel revealed that Primary Wave was “finishing off” that $500m-plus second fund. Citing people with knowledge of the matter, Bloomberg reports that the Oaktree Capital investment coincides with the closing of Primary Wave’s as-yet-unannounced third fund. Those same sources tell Primary Wave that the investment “sets the stage for Primary Wave to consider a public offering of its fund operation”.
In a media statement issued today (June 11), Oaktree says that it will “help strengthen Primary Wave’s financial positioning as an asset manager of iconic music and this substantial funding will add to Primary Wave’s already formidable war chest for future catalog acquisitions”. After completing the Oaktree deal, Primary Wave says that it now manages $1.5 billion in cash and assets. This deal was finalized by Primary Wave’s Founder & CEO Larry Mestel and Oaktree’s Co- Chairman & Chief Investment Officer Bruce Karsh and Managing Director & Co-Head of North America Brian Laibow.
Larry Mestel, Founder & CEO of Primary Wave said: “The Primary Wave team is honored to have such a respected financial institution and talented team supporting our efforts. “Bruce Karsh and I have had a working relationship for over 15 years and he has the unusual combination of business savvy and creative sensibility towards music.” “This is an exciting new chapter for the entire company as we continue to grow and evolve our business.”
Bruce Karsh, Co-Chairman and Chief Investment Officer of Oaktree Capital, said: “I’ve long admired the business model and success that Larry has built for Primary Wave and saw this Partnership as a unique opportunity to diversify our investment portfolio in a growing and uncorrelated asset class. “As a true music lover myself, I’m dedicated to the company’s growth and future success.”
Laibow said: “The value that the Primary Wave team adds to a hit song by a classic artist like Whitney Houston or Bob Marley is hard to compete with. “It is quite impressive how many legendary music catalogs Primary Wave has acquired over their 15 years in business and we are proud to be aligned with Larry and his team for this next chapter.”