Veteran private equity investor Howard Lipson and longtime music entrepreneur James Diener have formed Alignment Artist Capital, a new financial firm with funding from BlackRock, Inc., the world’s leading hedge fund manager.
“We at BlackRock are excited about the opportunity to work with Howie and James to support leading artists in today’s highly dynamic music industry.” BlackRock said. “The founders of Alignment have already proven their ability to anticipate trends and create modern business models to thrive in today’s dynamic global market. We are pleased to be working with them.”
Alignment is being formed at a time of significant change in the music industry, as global music consumption continues to rise, with $15 billion per year being spent globally on live music, estimates show it could grow into a $20 billion annual industry.
The founding of Alignment reunites Diener, former CEO/President of Octone Records with Lipson, who along with other professional investors were key strategic and financial backers of Octone.
Octone discovered and developed worldwide superstars Maroon 5, as well as platinum acts such as Hollywood Undead, Flyleaf and K’naan, among others. The private equity-backed Octone pioneered the “upstream” model by securing their artists further major record label marketing and promotional support.
At launch, Diener and Octone partnered with Clive Davis’ RCA Music Records Group/Sony Music Entertainment, and later entered into a joint venture to create A&M/Octone with Universal Music Group in a deal led by Jimmy Iovine, then Interscope Records Chairman. In 2013, Octone sold its 50% share of A&M/Octone to UMG.
Joining Diener and Lipson on the Alignment Artist Capital Board of Directors is Matt Botein, Global Co-Head and Chief Investment Officer, BlackRock Alternative Investors, and BAI Managing Director Patrick Riordan, who spearheaded this investment on behalf of BlackRock.
With equity funding from BlackRock Alternative Investors (BAI) accounts, Alignment will work with artists who have already built a foundation of creative and business initiatives such as recorded music, songwriting, producing, touring, TV and film, merchandising and licensing, social media and more. The company will build a diversified portfolio of structured investments in targeted artist and related entities that will initially range from $5 million to $20 million per transaction. In turn, artists who receive capital from Alignment will have access to funding for a diverse set of revenue streams and to help them pursue business objectives under a new model that co-exists with the industry’s existing recording, publishing and touring agreements.