"Bowie Bond," after musician David Bowie, is the name given to bonds offering investments in the future earnings of a musician. In 1997 David Bowie used the device to raise $55 million.
Bowie Bonds are an asset-based security. The idea is this: the investor pays money up front to buy a bond providing a revenue stream produced by the royalties from the artist's music. If the royalties meet or exceed expectations, the investor's investment is sound. If the royalties decline below expectations, the investor loses and the value of the bond declines.
The strategy of securitizing revenue streams generated by an asset can be applied to all forms of IP assets and is becoming an increasingly popular investment strategy making recent news.
Forbes Magazine recently reported here that Ross Perot is a principal investor in a $200 million patent-backed investment fund offered by Chicago-based Ocean Tomo.
Separately, the Wall Street Journal reported on the return of music-backed bonds in an article entitled "Bankers Hope for a Reprise of Bowie Bonds" on August 23, 2005.
For all you ever want to know on the subject of Bowie Bonds see "Who's Who in Bowie Bonds"
