Ep. 8 Why Invest in Funds to Music Royalties?

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Welcome to the My Private Network Podcast!

Interested in learning about private market investing concepts and opportunities available to you?

This week's episode features our co-founder and host, Bob Simpson, who gives you, the investor, a chance to hear from industry experts about why you should consider investing in music royalties.

Today's Expert Guest

David Vankka
ICM Asset Management

Today's Questions of Intere

Share your background and how you decided as a firm to get into the music industry?
Tell us about music royalties and how you generate revenue through music?
Do you need to buy music directly from the artist?
Can you explain songwriting credits and what goes into these catalogues?
Could you explain the artist's incentive to monetize their catalogue?
Are their sources you use to when navigating the investment exchange?
How do you value and pay for the rights to music in an investment portfolio?
19:37 What do you see as the future of streaming and how will music, intellectual property and cash flows evolve over time?
With music royalties, is it a equity or fixed income investment? Where do you slot that in?
Could you walk us through potential returns, risks and price volatility?
How many songs in your portfolio? How many pieces of music?


Bob Simpson: Greetings, dear listeners. I'm Bob Simpson, your host, and you're tuning in to another enlightening episode of My Private Network Podcast. Today, we have something truly special in store for you, as we're joined by David Vankka, an expert in the fascinating world of music royalties investing. So get ready for a fantastic discussion.

Now, most of us share a deep love for music. And for many, a career in music is simply a dream. However, there is a common hurdle. Not everyone is born a musician or songwriter. The good news is that now there's a way to profit from the music industry, regardless of your musical talents. It's called investing in music royalties.

We all have our favorite songs and artists. Every time we ask Siri to play a tune or stream music on a platform like Spotify, someone gets paid. And now that someone can be you. Today's guest, David Vankka is a leading figure in managing portfolios of music here in Canada. He oversees a fund that holds a diversified collection of music.

And whenever a song is played, his investors receive a royalty. So David, welcome to My Private Network podcast.

David Vankka: Thanks, Bob. And thanks for the time today. I really enjoy speaking with you. This is going to be great.

Bob Simpson: This will be fun. Let's share your background, talk a bit about your firm. And really what, what I'm interested in is how you got decided as a firm to get into the music industry?

David Vankka: Sure. A couple of questions there. My background is predominantly from the finance world. So spend a lot of years on the sell side and investment banking business and ultimately moved over to the private capital markets probably close to a decade ago.

And our firm ICM Asset Management is designed to run a number of strategies for our investors that are focused on perhaps real assets that require some high touch. So if we run over $2 billion in total assets and real estate is prominently one of our verticals in the U.S. and Canada, and music royalties is one that we started about three or four years ago. Really on the premise that when I've been passionate about music and like you said I don't have the skills to be anywhere near a competent musician.

So I had to look for another angle, but truly we were in this environment where music streaming was really starting to change our lives and the way we all as individuals were consuming music. And it was just an interesting, you know, as an asset, you know, forgetting the music itself, it was just very interesting because it's quite diversified from anything else in people's portfolios.

So people listen to music, whether the stock market is up, the stock market is down, people listen to music, you know, regardless of what's happening with interest rates or the general economy. And I think those trends are continuing, and we've been really excited about the strategy today, and we're starting to see the entire space become even more global.

So that's kind of our genesis for getting into it in the first place.

Bob Simpson: David, let's go right back to the, cut it right back to the bone here. And let's talk about, let's do music royalties one on one in really simple terms. How do, how do you generate revenue through music?

David Vankka: Sure. So if you think of, I guess, any asset that somebody owns, if somebody else uses it, they have to license it or pay a fee.

You know, you go get a car, you've got to go rent the car and pay the fee. So what's happened with music is even though it's intellectual property, when someone writes a song or someone records that song, they've created a copyright and that's their work, just like any other intellectual property would be.

So with that, they're entitled to receive a royalty or a fee for allowing others to use that music. So in real simple terms, if you think about it, music is everywhere. It's, it's on the radio, it's certainly on the streaming services, which is the largest way we're consuming it now, but it's also in your fitness class, on your fitness app, it's in your video game, it's in your movies, it's everywhere.

And what happens is, anytime a song is played, a royalty is generated, and typically a, say, a Spotify or an Apple Music will take their share, and then the rest of that gets distributed down to the rights holders, which could be the songwriter, or the band that recorded the song and they could be the same. Or owners of the assets like us who have acquired these assets off of songwriters and musicians and producers and other people who have worked in the space who have generated those rights.

So that's how we, how it works. And, you know, fortunately, we don't have to collect every individual royalty groups in between distribute the music to the services like Spotify and collect the checks on a quarterly or semiannual or monthly basis. And we received those royalties as a result of that. So that's effectively how it works.

So we're looking for songs that are growing in audience, growing in streaming bands that are active and also, music that is being licensed into videos, movies, commercials, any other form of media that people are consuming.

Bob Simpson: Now, David, if you go on Spotify and you cruise down to the bottom of the app, there are three dots.

And if you press the three dots, you can actually see who has all the rights to, you know, the writer credits or the production credits or that sort of thing. So you don't actually need to buy the music directly from the artist.

David Vankka: That's right. So we, we've acquired catalogs from producers as an example. We acquired a catalog off Taylor Swift's original producer, which will be the most high profile name anywhere in the space, and they would get paid a certain percentage or certain amount of points off those masters that they help make and create.

We also acquired a catalog off in a state of the former manager of Gordon Lightfoot and Janice Joplin. And it was also Bob Dylan's manager, although we do not have those rights. So it can be anyone in the ecosystem. Typically, songwriters are often interested in moving their catalogs. And some songwriters are very, very prolific artists as well who write for a lot of other people and, and write for themselves. And we can acquire it off band members and other individuals connected to the band themselves.

So there's a few different places where those rights can be acquired and every acquisition or catalog is a little bit different between what the seller's intention is to sell. But there's different sources of it and as a result, we also think that gives us a bit of diversification across those two copyrights.

Again, the one for the writing of the song originally, and the one for actually recording the song.

Bob Simpson: It's interesting, if you have you ever looked at it? At the stats for one of the Drake albums or, or music?

David Vankka: It gets a lot of plays.

Bob Simpson: It gets a lot of plays. If you look at, if you look at the if you, if you look at the list, the songwriter credits, there's like dozens of people who have songwriter credits.

So. You know, I think that's probably a way that he pays off some of his friends is, yeah, I'll just give you some credits on these things.

David Vankka: The entourage, you know, there's genre specific items that go into each of these, these catalogs and, you know, hip hop as an example, there tends to be. A lot of writers, you know, a lot of producers, sound engineers, but just a lot of people going around either other genres aren't quite the same way.

And maybe have one producer and perhaps the same person writes and records the songs as well. It's certainly a more economically efficient endeavor doing it that way. But yeah, certainly.

Bob Simpson: It's a little more sticky, right?

David Vankka: Yeah.

Bob Simpson: Some of the, some of the rights are stickier than others. There are some that would just like to cash it in and take a check.

And there are others who would like the flow of the credits over the years.

David Vankka: Yeah, and I think when, when COVID hit, a lot of these artists make a lot of their money from touring. And with touring completely stopped, their incomes were, were out the door for a little while. So, you know, while we're buying the streaming rights and that's our priority, it takes a lot of streams to make money for a lot of these artists along the way.

So, so for a lot of them, their touring is a bigger part of their, their revenue stream. And I think because of that, it incented a lot of artists to go ahead and try and monetize their catalogs. And we're now at the spot where the older artists are doing their own estate planning and looking to monetize or have monetized.

And younger artists who are in the primes of their careers still and creating and building new music, a lot of them want to have more control over what they do going down the road. So they can take some of those proceeds. They can reinvest in their own career a little bit through their own production or, or studio or their own record label, or perhaps take less of an advance with a larger distributor and record label and continue to kind of control maybe a little bit more of those rights going forward.

And I think finally, some of them are realizing diversification is not the worst thing in the world either. When your entire career is based on you touring and making music, taking some of that and buying a little real estate or investing in a portfolio alongside is generally a pretty good idea for some of these artists.

So that's kind of the genesis of it. And I think when somebody like Neil Young went ahead and monetized his rights, it became acceptable for anybody and everybody to do it, given sort of how high integrity he is about going his own path. So it's, it's become much more commonplace, I think, or acceptable for artists to kind of consider that path to help them, you know, manage their own life goals going forward as well.

Bob Simpson: So for the intellectual property owner, be it an artist, a record label, or an investment fund like yours, it's pretty straightforward. When a song is played, you get paid. David, how do you source the music? You know, there's a term in the industry, boots on the ground. And, you know, when I've talked to Mike, who is my primary contact over at your firm, you know, he, he mentioned that in the music business to do this properly, you need to have boots on the ground.

What exactly do you do to source music for the fund?

David Vankka: Fortunately, we've built a track record over the last number of years by doing over 20 acquisitions and, and getting our name out successfully through that whole process. But really a lot of it is building a network on the ground. And we do have one of our partners, Devo Harris, who does live in New York, who comes from the music space, and he was actually a John Legends roommate in college. So he's definitely a connected individual in the industry and runs a interactive video technology company now as his full time job.

And then we also have a number of entertainment lawyers, law firms that we deal with. Who in addition to helping us or being on the other side of a deal with us, they also manage catalogs for a lot of artists.

And between them, the artist business managers, and a group of catalog brokers that can be as sophisticated as a, large investment bank to a very unsophisticated brother of a band member and everything in between, we tend to see a lot of deal flow. And so part of that's having a presence in those markets, traveling there regularly, part of it through COVID.

I think with that starting, you know, we were able to get a lot of meetings and relationships with people who are now in the zoom world. Which I think saved us some time certainly versus trying to build it from scratch and say a pre COVID era. And yeah, that network continues to be important to us. So we try and be transparent when we're putting offers out and we try to put offers out that we can close on.

And because we do have discretionary capital in the fund, we've never had to walk away from a deal for any capital reasons or anything like that. So, I mean, occasionally there's due diligence reasons. But you know, just having that reputation as a trusted counterparty is pretty important. And then we do get introduced to new sellers either directly like, like anything else, word of mouth, sort of get that trusted relationship delivered by someone who's very close to a potential seller.

So that's, that's really how our deal flow and origination works. And our pipeline has been incredibly strong across all deal sizes now as well. And that would have been my, number one concern a year before we started the fund is how is the deal flow going to work? But now we've got sort of that established track record down there and it it helps immensely.

Bob Simpson: Yeah. So you tend to go more direct to the artists or to the sources. As opposed, there's an exchange, right? That, which music royalties trade. Do you prefer to go directly or how would that compare to, to others who would buy directly through an exchange?

David Vankka: There's a market network place called royalty exchange, which sells smaller interest in catalogs and they've done, I think, a great job creating some access in the market. The deals tend to be smaller than what we're doing for sure. And for an average investor, you have to buy a lot of those to create some diversification versus, you know, a fund like ours where we already have quite a few catalogs in it.

It's hard to do those directly and pieces off of something like royalty exchange, you know, now having said that they have, I think, been great in terms of the foreign market, I think great in terms of having smaller interests. Give the small deals, the ability to transact. And they also have, you know, they act as a counterparty for people in terms of having a standard contract and things like that.

You know, each deal we do has a deep and lengthy asset purchase agreement. Which has certain representations and warranties on the seller that they own what they say they own, they are able to sell it. If someone comes out of the woodwork, it's on them to fix it. We do lean searches on counterparties and, you know, a bunch of other due diligence along the way.

So it's a much more, I think, involved and in depth and more legal intensive process on those larger deals because you do want to protect yourself and the assets that you're purchasing because, you know, unlike real estate, you just can't walk over to the building and touch it necessarily. So, so that's how, that's how we provide it.

And then we, you know, we will buy direct from artists or writers. But we will also do deals that are shown to us from certain lawyers or business managers or catalog brokers along the way. And you know, we're finding probably 70 or 80 different sources of inbounds on catalogs now. So there's, there's definitely a, a market out there for those sorts of deals.

Bob Simpson: Yes. Let's turn our attention to your portfolio. As Portfolio Managers, we all have our niches, we all have our areas of primary interest. What does your portfolio look like? And, you know, to throw a second question at you here, when you're purchasing the rights to music, how do you value them? What do you pay?

David Vankka: I'll start with the second question. So, when we acquire a catalog, we're looking at the cash flow that's being generated from the catalog, and we're trying to make some predictions about what cash flow is going to be generated from this catalog going forward, and the prediction of that has a bunch of factors in it.

Obviously, what it's been doing recently, what kind of genre it's in. How old the catalog is, is very important. Meaning it's a lot easier to predict what Janice Joplin is going to do in her catalog versus a newer catalog that's only three or four years old. And less than that becomes really quite risky because you just don't know where it's going to ultimately settle out in terms of listening going forward.

So those are some of the main factors in there. And then we take a look at other qualitative factors such as, you know, is the artist still active or not? Are they touring? Are they collaborating with other artists? We're starting to see.

North American artists collaborating with K pop artists, latin artists, and things like that because the reach is gigantic in other parts of the world as well. So we're seeing those things going on. So we like to see active artists. We certainly pay attention to their social media trends and everything else.

And also the, on Spotify, are they growing on their playlists? Are they growing on their listener base? And we sort of roll all those factors in to kind of build our forecast going forward. And then it becomes a negotiation about the catalog. So typically we're trying to generate returns north of 10%, but you will see these headline deals are trading at very large multiples of cash flow.

For a while it was closer to 25, but it might be closer to 20 now. But we're trying to buy catalogs, you know, at about half that because we think the entry point is really, really important on the valuation of these things. And with respect to our portfolio itself, yeah, we're, I mean, that's the most exciting part. We're really excited about that diverse group of really talented artists and musicians whose rights were fortunate enough to be able to steward for them.

And we've cover all, all genres and all different types of artists. So, you know, it ranges from certainly artists like Taylor Swift and John legends where we have some rights. We've got some great country rights. We'll say Tim McGraw as well. We also have smaller independent artists like the Midnight, who is in an electronic genre that people may not know, but the people who listen to it are very devoted listeners.

So their base has been growing in as well. In the past few months, we've acquired interest into the Lumineers, which is one of the fastest growing alt rock, folk rock bands out there. Still very active. We've acquired rights to NSYNC's Bye Bye Bye song from a writer who was over in Sweden. And, you know, whether you love that song or don't love that song, it's hard to get out of your head all the way forward, you know, and things like that, they've been contemplating a reunion tour and all those things sort of help us out.

We recently announced a catalog from actually a fellow Canadian, Kevin Churko, who lives in the U S., on writing and producing for a number of hard rock bands. Including Five Finger Death Punch, Disturbed, a number of others. And it's a great catalog. So we're really excited about that one as well.

So those are some of the diversity of what we're doing, but we own catalog in the classical genre. We acquired two Latin catalogs this year, one from Anuel AA, who's from Puerto Rico, and he's one of the top Latin artists out there, that notch behind the J Balvin and Bad Buddy, but not far behind. And we acquired a catalog from a Venezuelan artist called Nacho.

He grew up as a child celebrity into a duo, and the music's becoming very popular across the world, outside of Latin America. So, Latin's been the fastest growing part of the market over the past couple of years. And we're excited to have some exposure and a couple of catalogs there as well. So the overall takeaway is we're not trying to predict if an artist is going to get big.

We're not trying to find the next superstar. We're trying to find artists that are established. They have some track record in terms of, you know, their royalties and with their earning. Cause at the end of the day, it's an, it's an investment. So we want to make sure we're comfortable with that. And then we're just trying to have that genre and artist diversification.

So that if all of us decide to stop listening or listen a lot less to a certain genre, or if a certain artist does something to reduce its listener base, we're not as exposed to any individual events. Although it's funny when an artist does something bad, sometimes it actually increases they're listening.

So it's kinda how it works sometimes.

Bob Simpson: The music industry has undergone significant changes. It changes over the past few years. Everything from piracy to Napster to streaming services like Spotify. As we look into the future, what, what do you see as the future of streaming and how will music, intellectual property, cash flows evolve over time?

David Vankka: Yeah, that's a great question. We're going back, you know, 20 years now, but music was in a very, very hard spot when the CD was starting to decline and digital downloads were being pirated, obviously, with Napster and everything else. And the entire industry needed a way to reinvent itself. And certainly consumer dollars weren't going there in the same way.

So streaming and the adoption of smartphones and obviously an increase in bandwidth has really, really changed that dynamic. And with that being said, you know, one of the things that we're seeing is a lot of new revenue sources that wouldn't have been predictable, you know, years ago have all come to the forefront in the last few years. And every one of these uses music, obviously, tick tock is a great example. But beyond that, anything in the fitness world, such as Peloton or the video game world through things like Roblox or Fortnite or others, and they're even having live events at in these video games, where somebody like Travis Scott will do something and there will be 20 million people who will watch it.

So it's kind of crazy the way that consumption sort of move forward. And we see streaming continuing to grow. It's interesting, Luminate who does the industry data effectively, it was the old Nielsen from the boxes you had on your television that they told what channel it was is now called Luminate. And they track all the streaming and really the best data source of the industry.

And they showed global growth of, I believe, 23 percent last year for 2023. And those numbers were ahead of what people were expecting. And even though you think within the U.S. in particular, most people have some form of streaming. It's still growing at albeit at a slower rate, but the rest of the world is growing faster, both in terms of volume as well as pricing.

And as well as I think this globalization of music, taking regional music from pick your spot, Mexico and people listening to it in Spain is starting to kind of continue to grow. So those are some of the trends that we see within the streaming world itself. We saw Spotify raise their prices for the first time in 12 years, and I think there could be a long way to go in terms of price increases by these by these digital streaming providers because it's just the cheapest form of entertainment out there and virtually nobody is cutting off their Spotify subscription even if they doubled it.

Video is a little bit different because you might have six subscriptions. The prices might get high, and if the economy is struggling a little bit, you might cut one or two of those out. And also with video, you might watch it once. You might get your Disney Plus to watch Mandalorian, Bobafet, whatever you want to see.

But then, if times are tough, you might cut that out as a discretionary expenditure. Well, this is still a utility or consumer staple. So, that's where we're going to, I think, see quite a bit of potential upside in the industry as well. And again, it's been talked about for a while. But this was the first time we've actually seen that active price increase.

So I think a lot of positive tailwinds ahead for the industry itself. And the last part of it is we're seeing more money go to the songwriters than there was in the past after a rate appeal with the U. S. Copyright Royalty Board. But what that basically means is the pool of money that gets paid to the actual artist has been increasing and there's been a large lobby effort by people like the National Music Publishers Association and others in the United States to help get more money into the hands of the songwriters themselves.

So all those things being said I think it's going to be some positive tailwinds in the sector itself. And you know, other trends we do see, there's a move to a more artist centric model at which we'll start to see, which will be good for us. So on Spotify, it's not just Spotify, but historically the money wouldn't necessarily go to who you listen to.

And 75% of the songs on Spotify have less than a thousand streams, maybe it's 80%, but it's a giant number. So they're not going to pay those anymore. So any white noise or uploaded music that doesn't get listened to those amounts are going to go to artists that people are actually listening to, which is a welcome change, I think, in the industry.

So I think streaming is absolutely here to stay. Artificial intelligence comes up obviously in every conversation these, these days. And you know where I think that's going to lay out and people smarter than me on the production side to think as well, it's going to be an enhancement to creating these works for artists and songwriters and giving them the ability to help create more works and things like that.

I don't think we're going to see all these songs replaced by music written by AI, and there's also a massive, massive copyright problem in terms of how models were trained and where they got that training data from in terms of how that's used. So you know, while it's a dynamic time, I don't think AI music is going to replace the real Drake and the real Weeknd for their songs.

So that's where I think we're going to see for the next few years, but those are some of the main trends and we feel pretty positive here for the next foreseeable future.

Bob Simpson: So at the end of the day, David investors need to understand how do they use a product like music royalties in their portfolios?

Is it an equity? Is it fixed income investment? Where do you, where do you slot that in?

David Vankka: Yeah, I slot it in as what I would call alternative income. There is a bit of a hybrid equity component to part of it, but I would call it alternative income. So the equity component comes as these catalogs can grow in value and as the industry continues to grow.

But at the end of the day, we start acquiring cash flow from these catalogs within typically three months of acquiring them. So we distribute that cash flow out to investors via distribution and where people like to look at some of the benefits. You know, one is this diversification benefit. So when Covid hit or Bonds and stocks both had big drawdowns because of liquidity was just hiding in the U.S. dollar for whatever global event was dragging it there.

Music royalties continued to perform because people were listening to music. It's not driven by the same factors as some of these other asset classes. So I think that's a really important key and that that's an attractive point for some investors. You know, secondly, the growth in streaming creates a you know, sort of a macro tailwind in the industry that is continuing to grow again as a future goes forward here and that combined with some pricing power makes that just an attractive sector play and then the life of these assets are typically over a hundred years.

So, and any copyright that was created after 1978 has a life of 70 years plus the life of the artist or the last remaining band member. So it's a perpetual asset for all intensive, I guess, economic terms. And that really fits the long term. Thinking and long term allocation for a lot of investors.

And, you know, this is why you've seen a handful of pension plans investing heavily in the space for a long time, because it matches that long cycle for their annuitants over time. And, you know, the final part of this is once these assets are owned, there's no incremental capital costs. There's very, very little in the way of other costs.

You know, it's not as if it's operating a business where you can certainly have a profit and loss on that business. And you don't have capital calls because of cost overruns or timing delays. You really have the right to these top line revenues out of the gate. And, you know, I think people like the lack of risk there.

And we have zero debt in this portfolio today. We have the ability within our fund to go to 25%. But, you know, the asset typically take 50 to 60 percent debt from lenders for those who want to put that on there. So we also try and be conservative with our leverage on this particular asset classes as well.

But those are, I think, probably the main characteristics for how it might fit in a portfolio. Again, it's, and people like to talk about it. They want to tell their kids they got an interest in Taylor Swift song.

Bob Simpson: So David, just some final thoughts on music royalties as an investment returns. Potential returns.

What do you think the risks are? What's the price volatility? Maybe just touch on that.

David Vankka: The price volatility has been fairly low just because again, these are very very long life assets, so we don't see a lot of dramatic valuation change, you know month to month. And and again that's a testament to these being long long life assets. And we will see different data points from our underwriting, but we need to see trends before you start to see, see much in the way of dramatic moves either way.

I think this asset class, you know, from a return perspective, you know, we're targeting that 10 to 12 percent return unlevered, which I think is a really important consideration. And when you think about it, you know, we can buy catalogs, you know, if your headline catalog for David Bowie trades at 25 times cash flow, as an example, we're buying a catalog at 10 or 12 times cash flow.

We don't always believe the cash flows are going to stay the same, but we do have more confidence that we've got a defensible position on a lot of these assets. So the risk for any particular song or artist is less people start listening to it. We definitely have an intention that's created us owning over 20 catalogs and continuing to grow to build out that diversification of, I guess, consumer tastes and preferences.

We don't see inflation risk in an asset like this. We think there's a lot more pricing power from the likes of Spotify. Just using that as an example, then there is with inflation and we do not see, you know, interest rates themselves have no impact on the cash flows of our portfolio. You know, ultimately, if rates stay high or go higher, and it feels like we're probably done there for a while, but those will affect the terminal values of these assets.

I think where we are today, I think, you know, part of the attraction has been this asset class is a little bit agnostic to what's happening with those, those factors in terms of the actual cash generation that comes out of it. So we're still reliant on, on streaming providers, U. S. regulations, which are going in the favor of songwriters as I think they should, but they can also, you know, change what percentage of the dollars are going to the royalty pool.

So, so to speak as time goes on, but yeah, those are some of the main considerations with it. And I think probably the biggest risk is overpaying on a particular catalog and it just takes longer to have that asset paid out than anything else, particularly without any debt on the portfolio.

Bob Simpson: Right. But that's why you diversify.

David Vankka: That's right.

Bob Simpson: You always diversify. How many songs in your portfolio? How many pieces of music?

David Vankka: Well, we look at it by catalogs as a starting point. When I say a catalog, that means an individual asset. That could be an album. That could be all of the artist's album. That could be all the songwriter's work.

So it varies in terms of what that is. But in terms of actual number of songs, we would be over 3, 000 songs. People like the Metric I'm not as fond of it because we acquire something like Bye Bye Bye, and that's really one song in a catalog, and that might be more valuable than another catalog which has has a couple hundred songs.

And a lot of our acquisitions, we take a pretty hard look at what proportion of this catalog does the top ten songs, or five songs, or eight songs. And that tends to be where the bulk of our work goes in terms of our analysis on those, the higher value or more listened to songs that are actually in the catalog.

Bob Simpson: Yeah. What we know is that when a private debt and equity, when people come and look at our website, we see where the interest is. And a lot of people have been clicking on music royalties. It's, you know, it's something different. I think. People connect to the music and they think, you know, this is more interesting buying Royal Bank or BC. You know, and especially, you know, if you're looking at 10 percent returns and you compare that to a bond fund, you know, where bonds are still yielding under five and you're paying a manager 0. 9 and you run the risks of rates go up . You could have pretty bad returns as we did a couple of years ago, that, you know, this is kind of a sensible investment for people as part of their portfolio. And we use it in one of the funds that we run. And we're continuing to build a position in your fund, but you know, thank you today.

David, I appreciate you coming out and spending time with us here today. So yeah, so thank you so much.

David Vankka: No, thank you as well. And thanks to your listeners. And, again, we're excited about the future for this asset class. So really appreciate the time.

Bob Simpson: Yeah. So just to close up here, a heartfelt thank you to you, David, for sharing your thoughts and valuable insights today.

This podcast will be available on privatedebtandequity.ca as educational content for music royalties to delve deeper into the world of music royalties. Visit our website at privatedebtandequity.ca, click on concepts and explore music royalties before making any investment decisions. It is crucial to consult a financial professional.

Advisor to determine suitability full disclaimers are available on privatedebtandequity.ca. Now don't forget to follow us on your preferred podcast platform and subscribe to our youtube channel to stay updated. I'm, Bob Simpson. It's been my pleasure to guide you through this enlightening conversation.

Remember knowledge empowers you to make well informed investment decisions and progress towards your financial objectives until we meet again, stay focused and disciplined on your financial journey. Thank you so


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