David Bowie’s foresight in the world of investing should be allowed to live on

Today marked the passing of an icon, David Bowie, who departed from this world today at the age of 69 after a very private battle with cancer. A career which spanned over 40 years provided a worldwide audience with a continually modernizing style of music which began with his pioneering efforts in glam rock in […]

Today marked the passing of an icon, David Bowie, who departed from this world today at the age of 69 after a very private battle with cancer.

A career which spanned over 40 years provided a worldwide audience with a continually modernizing style of music which began with his pioneering efforts in glam rock in the early 1970s through to the ambient years of the 1990s.

It has often been said that David Bowie lived the future – his music being a clear reflection of that – and yet had no real regard to think too far ahead, feeling his way into the future of music the way that a blind man finds his way ahead by sensing it with the end of his fingertips.

This avantgarde means of keeping millions of fans entertained extended into his very innovative efforts in the world of finance.

Celebrity bonds were largely his creation, after investment banker David Pullman invested $55 million in the colloquially termed ‘Bowie Bond’ in 1997.

These celebrity bonds were commercial debt securities – effectively asset backed – which were issued by a holder of fame-based intellectual property rights to receive money in advance from investors on behalf of the bond issuer and their celebrity clients in exchange for the right to collect future royalty monies relating to the works covered in the intellectual property rights listed in the bond.

Genius it certainly was, and typically backed by music properties, caught the mood of the moment in post-80s Britain reflecting David Bowie’s inimitably intellectual songs which flew in the face of the post-instrial and anti-capitalist ‘grunge’ scene of the time as a polar opposite.

Unfortunately, in 2007, after the concept of the celebrity bond had been long since embraced by many other esteemed artists including James Brown, Ashford & Simpson and the Isley Brothers, as well as capturing the inaugural interest in the ‘digital age’ when iTunes and other legal online music sources led to an increased interest in celebrity bonds, the concept ceased to exist after the 10 year expiry date had passed, and the royalty rights of David Bowie’s pre-1997 works were handed back to him.

An attempt by Goldman Sachs in 2011 to revive the concept in the form of a SESAC (Society of European Stage Authors and Composers) bond was canned due to lack of interest.

Despite a good return, with the bonds paying an interest rate of 7.9% with an average lifespan of 10 years, Moody’s downgraded the rating of the bonds from A3 to Baa3 in 2004, placing them just one level above junk status.

FinanceFeeds spoke to multi-asset investment company Hargreaves Lansdown today in order to gain the company’s perspective on the viability of such products, and it was explained:

“When investing in a bond, you are making your decision based on income stream expected for the capital sum payable, taking into consideration your perception of risk.”

“Celebrity provides the comfort of widespread name awareness, however this doesn’t guarantee success and as with most celebrity endorsed products there could well be a premium paid somewhere along the line.”

Read this next

Metaverse Gaming NFT

Dubai Museum taps Binance to jump onto NFT bandwagon

Dubai’s Museum of the Future, the $136 million UAE government-sponsored museum that opened a few weeks ago, is joining forces with Binance NFT to roll out a range of digital products on blockchain.

Digital Assets

Ripple and Lithuanian FINCI partner for XRP-based payments

Ripple is looking to expand its presence in Europe, forming a new partnership with Lithuanian electronic money institution FINCI.

Digital Assets

Crypto.com enables Shopify merchants to accept crypto payments

Crypto.com has integrated with Canadian e-commerce giant Shopify so global merchants can accept crypto payments and save on processing fees through cash-final settlements.

Institutional FX

FX volume drops 13pct at CLS Group in April 2022

FX settlement specialist CLS Group today reported that the executed volumes of currency trading on its platforms were notably down in April.

Crypto Insider, Opinion

Regulation: The Gold-Standard for Crypto-Assets

When the US supervisory authority SEC allowed an investment product referencing Bitcoin futures to be traded for the first time last October, this was widely perceived as a signal that cryptocurrencies had finally become established as an asset class.

Executive Moves

Solid hires FX industry veteran Darren Barker for multi-bank ECN’s business development

His curriculum vitae includes former roles at Cantor Fitzgerald, Sucden Financial, R.J. O’Brien, Jefferies, Natixis, Unicredit, J.P. Morgan, Raiffeisen, RBS International, UBS, Deutsche Bank, and Citi. 

Inside View

Mihails Safro, xpate CEO: Tips sellers need to know to overcome compliance obstacles

The unprecedented growth of e-commerce changed shopping dramatically last year. Many sellers suddenly faced a rapidly growing number of customers who had to stay home during the lockdown. When some clients adopted Netflix and Spotify as part of a daily routine, others ventured into online business. Robinhood alone saw a whopping 6 million rise in user numbers in 2 months. 

Institutional FX

BMLL delivers Level 3 data to Kepler Cheuvreux for order book analytics and algo performance

The solution covers more than 6.5 years of harmonised historical data from 65 venues and combines it with easy to use APIs and analytics libraries in a secure cloud environment. 

Digital Assets

Crypto Is An Invaluable Tool In The Fight Against Financial Oppression  

Crypto has proven itself to be much more than just a hot investment. Indeed, some say it’s poised to play a critical role in the future of finance

<