After nearly five years of negotiations, launching the asset-backed security “Bowie bonds,” and securing their place in Motown, Pullman Bonds are gold despite a less-than-gilded economy.
David Pullman, founder and CEO of the New York-based Pullman Group LLC (www.pullmanbonds.com), says the conservative, yet “sexy,” investment outlet is perfect for those “who get it,” especially when other investment options are not as attractive in today’s market.
In 1998, Pullman sealed a $55 million first-of-its-kind bond deal with David Bowie–birthing Bowie bonds. Under the concept, bonds are sold to investors who then collect royalties as their interest payments. Bowie got his future royalties money up front for a catalog of more than 300 songs, and investors got a 10-to 20-year guaranteed-payout investment.
“I got into this because intellectual property is the biggest in the world,” Pullman says. “We looked at what the historical cash flow was and realized its potential.” With this form of intellectual property, the artists get their assets directly while retaining ownership. Investors receive payouts fairly often, regardless of overall economic performance, thus making it ideal for large institutional investors.
Later in ’98, Pullman did it again by closing deals with Motown trio Holland-Dozier-Holland (who wrote such titles as Sugar Pie Honey Bunch, Stop in the Name of Love, and Let’s Get It On), raising $30 million. “When we first started Bowie bonds, people thought, ‘Are you kidding me?’ Then the next morning we got about 50 phone calls to buy them,” says Pullman. “But we’re not finished yet.”
Today Pullman bonds encompass song catalogs from artists like James Brown, Ashford & Simpson, and the Isley Brothers, and the company is currently in negotiations with Crosby, Stills, and Nash. In general, Pullman says pooling different artists’ catalogs is ideal for his bond. “Combining the royalties from radio, elevator music, television, commercial sheet music, Karaoke, and ring tones creates a larger volume of assets,” he says. “And a larger volume generates a larger return.”
“We plan to extend to film screenplays and scores, books, and visual programming,” says Pullman. “So many people have tried to replicate what we have done, but we were first and we will continue to be.”