Forget about investing in Boomer catalogs; alternative asset investing platform Public now allows members to invest in music royalties, starting with original music from the Shrek films.
Investing platform Public, known for letting members invest in alternative assets along with stocks, ETFs, crypto, and treasury bills, has announced the launch of music royalties under alternative assets. Beginning with the 768 composition tracks from the Shrek film franchise composed by Harry Gregson-Williams, investors can diversify their portfolios with an asset that produces cash-flow and can pay quarterly dividends.
Like all investments, royalties carry risk, but as assets with a low correlation with bonds, stocks, and other forms of traditional investment, they may help reduce portfolio volatility, increasing risk-adjusted returns.
The assets generate royalties when the Shrek films — Shrek, Shrek 2, Shrek the Third, and Shrek Forever After — and the television special Shrek the Halls are streamed, air on TV, or used in other broadcast programming, or whenever the music plays on a Shrek theme park ride. Notably, this does not apply to songs not originating from the Shrek films, such as “All Star” by Smash Mouth, and “Hallelujah” by Rufus Wainwright. Investors then receive royalties as quarterly dividend payments.
The Shrek IP became the second highest-grossing animated franchise in July, with over $4 billion in box office revenue. With a music library featuring hundreds of songs across multiple properties, earnings for investors stand to reach greater heights than with a single track. The series has cross-generational appeal spanning 20 years and is still relevant in popular culture, which may lead to it becoming a timeless asset.
“Investors are increasingly looking to diversify across asset classes, from stocks to collectibles to royalties,” says Keith Marshall, GM of Alternatives at Public. “By launching royalties, we are excited to give investors another asset class to build a multi-asset portfolio that can generate passive income.”
The entity holding the Shrek royalty interest’s initial share offering is $889,700, with 88,970 shares available at $10 each. Dividend payments are not guaranteed, and will fluctuate based on content consumption, so there stands a chance it will not pay out every quarter. Still, the asset generated an 8.5% dividend yield from 2022 royalties and an 8.33% dividend yield from 2021 royalties.