Slipstream is a production music business that was founded in 2021, providing content creators with access to its library of production music. It owns the well-established music catalogues of Cavendish Music (oldest production music catalogue in the UK est in 1937), 5 Alarm and Jingle Punks. With a catalogue of over 700k songs, it is the largest independent owner of production music in the world. Slipstream have contracts with the largest production houses in the world, including Netflix, Warner Media, Universal, AMC, FX, NBC, ESPN, ABC, Discovery and Apple. Production music is a specialized form of music created specifically for use in TV, film and paid advertisements. The music is composed, recorded and produced to be synchronized with visual media. Unlike commercial music, production music is pre-cleared for copyright and ready for immediate use in any project, making it a convenient and cost-effective option for producers of content.
Senior credit facility provided to a Slipstream SPV secured on a portfolio of music rights and royalties.
Senior exposure secured against granular portfolio of music royalties.
Underlying music catalogue comprises >700k individual song cues and a portfolio of contracted revenue streams from existing royalties. Our SPV has rights to receive these royalties in perpetuity. Underlying royalties are collected from TV shows that have long historical revenue data which back our statistical analysis on forecasted cashflows. The underlying portfolio is highly cash generative, creating ~$20m of top line cashflows per annum.
PSC funding into a UK SPV. All IP rights is owned by the SPV, with 100% of the cashflows paid directly into the SPV bank accounts.
Comprehensive covenant suite covering the portfolio performance and the financial position of the servicer.
Secured corporate guarantee and fixed and floating charges over relevant bank accounts.
Third party music administrator Kobalt collect 100% of cashflows from the royalties on our behalf.
Third party valuation provided by Virtu, a leading music advisory business who valued the portfolio at $79m
The facility is expected gross IRR of 20%+ IRR
Total Value
0%
– PSC provide a $45m loan against the portfolio of cues, secured on 100% of the cashflows produced by the music royalties.
Senior Exposure (PSC)
– Portfolio is valued at $79m by third party Virtu. PSC is secured at a 57% advance rate against the valuation of the portfolio.
57%
Key Statistics Facility
Cash Equity
– Portfolio generates $20m of gross cashflows per annum and is expected to increase into 2025.
Senior Secured
100%
Country Exposure
Global
Further revenue potential of library
– PSC also has a secured corporate guarantee over the Parent.
Industry
Music Royalties
Investment
$45m
Goodwill
Sourcing
Direct
Past performance is no indication of future results. There can be no assurance that the Fund will achieve its objectives or avoid substantial losses. Please also refer to the Disclaimer and Track Record Notes at the back of the presentation. The following data is based on internal PSC calculations, not all of which have been audited, and is subject to change. Actual results may differ from the results presented. Gross performance results are shown gross of investment management and performance fees, as well as all organisational and ongoing fund fees, costs and expenses (including audit and depository services). Return targets and structural protections are intended to be indicative. There can be no guarantee that any or all of the prospective investments will meet these investment criteria or that the target returns are achieved. The target returns are premised on a number of factors number of factors including prior investments made by funds managed or advised by Pollen Street and opportunities that Pollen Street is currently seeing and/or expects to see in the future, and assumptions with respect to the Fund's portfolio investment returns and the costs and expenses applicable to the Fund which are inherently uncertain and are subject to numerous business, industry, market, regulatory, geo-political, competitive and financial risks that are outside of Pollen Street's control. There can be no assurance that the assumptions made in connection with the target returns will prove accurate, and actual results may differ materially, including the possibility that an Investor may lose some or all of any invested capital. The inclusion of the target returns herein should not be regarded as an indication that Pollen Street or any of its affiliates or their respective representatives consider the target returns to be a reliable prediction of future events, and the target returns should not be relied upon as such target returns are neither a forecast nor a guarantee. Neither Pollen Street nor any of its affiliates or any of their respective representatives have made or make any representation to any person regarding the target returns and none of them intends to update or otherwise revise the target returns to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the target returns are later shown to be incorrect.
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