The Japan Times Online discusses unique investor funds which are often unregulated and serve to raise money for both ongoing projects and special events. What caught my eye was the Mongol Fund offered by Music Securities Inc., a “5-year-old company that now has 19 funds, investing mainly in domestic musicians.”

The Mongol Fund is rolling out this month and will raise money for producing cds and publicing the music of “Mongolian hip-hop group Tatar and as many as five other groups from the landlocked country.” They are also planning investments in musicians in China, South Korea, Singapore and Taiwan, though they don’t have a hip hop focus per se.

The funds that have matured returned between “30 percent and 50 percent of the profits logged by artists’ CD sales at their peak”, though it’s unclear what kind of ROI that produced. Music Securities hopes to raise 10 million yen, or a little over $91k in U.S. currency according to XE.com, for the Mongol Fund.

Masami Komatsu, President and CEO of Music Securities says:
“‘We pick up musicians who have talent and potential but have yet to come into the limelight’ . . . adding that CDs released by the musicians targeted by the fund have been hits in Mongolia, but the country’s music market has yet to be cultivated by Japanese or other foreign capital.”

Sounds like a ProHipHop Fund is in order. You know, that’s so crazy it just might work! If any ProHipHop readers have serious Japanese skills, hit me up and we’ll see what these guys say. We’ll get some good stories out of it if nothing else:
clyde(at)prohiphop(dot)com

Update: According to TheUBPost, “Mongolia’s Independent English Weekly News”, the Music Securities deal with Tatar may have been signed as early as May. This piece also claims that Music Securities has a distribution deal with Sony.

London based marketing agency Equator Media worked with Music Securities on a “compilation CD of British and Japanese music . . . to be released in Japan and the Pacific Rim . . . [in order to] promote and reflect the London scene to the Japanese market.”

Japanese E-zine Shift explains Music Securities in THE SECURITIZATION OF MUSIC, comparing the company to angel investors who back Broadway musicals:

“In the current world of investment, the security of various things produces cash flow. Music Securities Ltd. offers the epoch-making system, which secures the copyrights of music contents and handles the beneficiary certificate.
Given the present circumstances, an artist and her office bear the production costs when they produce an album. Therefore, an artist cannot start recording without a certain amount of funds. This system appeals to investors to provide production costs over the Internet.
In Broadway, U.S., there is a system called ‘angel’ that raise funds for a musical from investors. This securitization has an interesting point that anyone can participate in investments for a small sum. Of course, fans can and do. The first listed was Ms. Sodeyama Saki’s single and its security was already sold out. When this continues and scores a hit, this must develop more.”

Official site: Music Securities, Inc.