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MAKE MONEY FROM MUSIC ROYALTIES
‘Although music royalties may not be thought of as a real asset like a building, there is something strangely tangible about hearing a well-known song and realising you own the rights to it,” says Mike Pinggera, head of multistrategy at Sanlam Investments UK on why music royalties have been included in the Sanlam Real Assets Fund.
The fund has exposure to this relatively young asset class via the Hipgnosis Songs Fund, which listed on the London Stock Exchange in July.
It has so far acquired 1 230 songs that have achieved 1 646 top 10 chart positions across the world. These include the English version of Despacito by Luis Fonsi featuring Justin Bieber, as well as Beyoncé’s Single Ladies, Rapper’s Delight by the Sugarhill Gang and Umbrella by Rihanna.
Hipgnosis is paid every time these songs are performed, regardless of the artist, streaming platform or media. Funds like Hipgnosis buy catalogues of songs and effectively own the writer’s share of the songs.
Although it is early days, Hipgnosis is targeting an attractive yield of 5% a year, which is quite compelling in today’s low interest rate environment.
From an asset allocation standpoint, music royalties provide an interesting means of diversifying away from other alternative investments and traditional asset classes.
Brexit news and Donald Trump’s tweets can influence the direction of equity and bond markets, but these factors are unlikely to dictate whether a song gets played or not.
“We view music royalties as a welcome addition to a diversified real asset portfolio, and its attractive yields quality satisfies one of the fund’s aims of providing a stable and attractive income stream. It is an area that we will continue to explore for further investment opportunities,” says Pinggera.
SAFPS SAVES BUSINESS R2BN, BUT FRAUD TREND SHOWS INCREASE IN MOST AREAS
According to LexisNexis Risk Solutions, the annual impact of global fraud exceeds $1 trillion (R14.5 trillion) – enough to end poverty around the world; enough to fund cancer research and treatment over 40 years; enough to supply water to unserved communities around the world.
Meanwhile, a report on fraud statistics in South Africa, issued by the Southern African Fraud Prevention Service (SAFPS) for the 2017/18 financial year, shows a saving of more than R2 billion for SAFPS member businesses in South Africa.
Manie van Schalkwyk, executive director at the SAFPS, says the fraud statistics show increases in most types of fraud, with a few exceptions.
There is a downward trend of 34% where fraudsters fabricate ID numbers and/or names. In sharp contrast are cases of impersonation where fraudsters use legitimate information from consumers, which increased by 101% last year.
Employment fraud remains rife, with cases of false employment histories increasing by 16%.
Also in this category, the report shows the highest number of incidents in forged payslips at 17%, while the number of nonexisting employers increased by 16%.
Cases where fraudsters used a combination of fraudulent documentation increased by 47%, following the trend of the year before, where an increase of 46% was recorded.
However, the number of cases where candidates attempted to get away with providing false qualifications fell by 5%.
Fraud listing has increased by 26.5%. Perpetrators are mostly male and are 36 to 45 years old, while victims of impersonation have increased by almost 25% and victims of fraud are also mostly male.
Other good news is that growth in the number of protective registration records on the SAFPS’ database increased by almost 29%.
The highest category of people to register are men in the 36 to 45 age group, followed by men in the 26 to 35 age group.
By using protective registration, individuals can list their ID numbers on the SAFPS database for verification each time the ID number is used to apply for credit.
Consumers who are victims of identity theft or consumers who have lost their identity documents can contact SAFPS for a free protection service – SMS the word ProtectID to the number 43366.
Consumer tips to prevent fraud:
. Keep documents such as payslips and proof of address safe;
. Treat your ID like cash (be careful who you give it to) and immediately report lost or stolen IDs;
. Do not disclose personal information on social media and other platforms;
. Check your credit report with credit bureaus regularly; and
. Shred or burn old documents.
