Kongens gate 12 is a significant and important investment for TONO. Karl Vestli, CEO of TONO, explains.
In 2023, TONO purchased the apartment building in Kongens gate 12 in Oslo. In the spring of 2026, the renovation was completed, and the TONO house opened its doors as an office, meeting place, studios for music creation and an arena for members and the industry. The purchase is a significant investment for TONO, and has been made without affecting the settlements to Norwegian and foreign rights holders. How is this possible?
We spoke with CEO Karl Vestli about the background to the investment, how it is financed, and what it means for TONO's members.
Read more: Kongens gate 12 does not come at the expense of payments
TONO manages large cash flows on behalf of rights holders. TONO's work selling music licenses means that the money comes in at different times throughout the year. TONO currently pays out money four times a year, after receiving reports and documentation about what has been played, so that we know who is going to get the money. This means that TONO always has the members' money "on the table". book", pending their disbursement.
– What kind of money are we managing, and why does it need to be invested?
– When we collect money for the use of music, it cannot be paid out until we know exactly who will have what. It depends on reporting from users and quality assurance of the data. We are therefore managing funds at all times that are not yet ready for payment, and which we must take care of until they can be settled and paid out. Even immediately after one of the four annual payments to members, there are always several hundred million kroner that are not yet ready for payment. This is regulated in the Collective Management Act, which requires that the funds be managed properly.
– The law sets requirements for security, liquidity and return. We are required to ensure that the money is both available when it is to be paid out, and at the same time managed in a way that safeguards the interests of the members over time.
– How can we invest these funds, for example in real estate?
– This is stipulated in TONO's investment strategy, which was adopted by the annual meeting. It assumes that investments should be prudent and that risk should be spread. Therefore, we distribute the funds across different types of investments, and property is one part of this portfolio, along with funds and bank deposits.
A key question is how investments affect TONO's core task, which is to collect and pay out remuneration.
– Affects investment in Kongens gate 12 payments to Norwegian and foreign authors and music publishers?
– No. The investment does not affect what we can pay out based on reported music usage. The investment is not made in lieu of payments to members, but is part of the management of capital that is temporarily held by TONO until settlement. We always have funds available to pay out remuneration in line with reported music usage. What the investments affect is the level of financial income. Some investments provide ongoing returns in the form of interest, while others provide value through development or profit over time.
– Would members have received higher payouts if the money had been invested differently?
– There is risk in all forms of money investment. High risk often results in higher returns. TONO has a low risk appetite, and the strategy is therefore to spread risk and not be exposed to one type of investment. That is why we have both liquid investments and more long-term investments, such as real estate.
Choosing a property as an investment is one thing. Choosing this particular building is also about how the investment can be actively used and what values it creates beyond returns.
– Why have we chosen to invest in this particular building?
– We could have invested in property elsewhere, but by investing in a building that we can use ourselves, we get an additional effect. We can gather offices, member facilities and meeting places in the same building. When we own the premises ourselves, rental expenses do not come out of the organization. At the same time, we get a building that can be used by members and partners, and that contributes to activity in the industry. Other organizations that manage assets on behalf of others also invest in property, such as LO and Blåkors. A total capital that consists of both bank deposits, funds and property makes TONO financially robust.
– What have we emphasized in the rehabilitation of the building?
– The building needed a major upgrade, and we have carried it out in a sober and responsible manner. We have emphasized sustainable and durable solutions, and conscious use of reuse. Rehabilitating an old and inefficient building, with recycling of the waste, is also a good environmental measure.
The investment also has a side that is not directly about financial return.
– What kind of value does the TONO house provide beyond the financial?
– WE hope all members will be proud to be part-owners of this building. The building has already become a much-used gathering place for members, customers and the Norwegian music scene. There is a well-intentioned and good motive behind this. We want to offer something that is useful and positive for the entire industry and that this becomes a place for collaboration and activities. In addition to the financial value of the building, this is about facilitating community and new music creation. We has members all over the country, and not all of them will use the building on a daily basis, we are aware of that. At the same time, the ambition is that the house will provide value for the entire membership through what happens there and the effects it has on the music scene.
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