Hipgnosis raises more than £10m for songs investment

Hipgnosis Songs Fund has raised more than £10m to fund an unidentified investment as it competes to snap up catalogues of songwriting royalties.

The company said it issued 9 million shares at a price of 119.5p each and that the shares would start to trade on 5 May.

"The net proceeds will be used to fund an investment in accordance with the company's investment policy," Hipgnosis said.

The FTSE 250 company raised £75m in February to fund further acquisitions of song rights. At the same time shareholders allowed the company to issue up to 1.5 billion shares without offering the shares to existing investors.

Hipgnosis was founded by former Elton John and Guns 'n' Roses manager Merck Mercuriadis and is advised by Nile Rodgers of Chic. It has been buying up songs by artists such as the Pretenders, Fleetwood Mac and Mark Ronson to capitalise on the streaming revolution.

The company does not reveal how much it pays artists to acquire their songs, leaving investors to trust management that they are getting a good deal. The market for song rights is hot with Hipgnosis facing competition from other specialist rivals as well as music groups such as Universal, which bought Bob Dylan's songs for more than $300m in December.

Hipgnosis shares were little changed at 122.68p at 08:19 BST.