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24 août 2007

Venture Capital, Rockin' to the Oldies

As Music Industry Sales Sag, A London Bank Steps In To Fund Veteran Performers

LONDON -- Past-their-prime rock bands are used to being ignored by record labels and mocked by the music press. But, in Britain, they've found a new groupie: venture capital.

A boutique London investment bank, Ingenious Media PLC, is financing comeback albums. Last month, it signed UB40, a reggae band that had a No. 1 hit in 1988 with the song "Red Red Wine." Other artists working on CDs for Ingenious include veteran rocker Peter Gabriel, and the techno punk band the Prodigy.


Ingenious was founded in 1998 by theater producer Andrew Lloyd Webber's accountant, Patrick McKenna, a former partner at accounting firm Deloitte & Touche. One of Mr. McKenna's early clients at Deloitte was English singer Peter Gabriel. The two men became friends, and Mr. Gabriel invested some of his own money in the Ingenious music venture-capital funds.

The two men agreed Ingenious would invest in Mr. Gabriel's next album, and in January, Ingenious paid $2 million for a 24.95% stake in Mr. Gabriel's 14th album, scheduled to be released next year. The deal gives Mr. Gabriel control over promotion and distribution of the still-untitled album in North America. Elsewhere, Mr. Gabriel is still signed to the Virgin record label.

Ingenious doesn't ask its rock stars to act like rock stars, something that appeals to the 57-year-old Mr. Gabriel, says Mike Large, chief operating officer of Peter Gabriel's management company, Real World Holdings Ltd. Musicians of Mr. Gabriel's age and experience are "not hungry for the circus of publicity, touring and autograph signing," he says."We know we have a great fan base who will buy the record if you tell them it's out there," Mr. Large says.

Dave Goldberg, a music entrepreneur at Benchmark Capital, a U.S. venture-capital investor, says it's too early to say if Ingenious's approach will take off in the U.S. "But we are going to see more and more of these different ways of creating financing for bands," he says.

Write to Aaron O. Patrick at

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