The review was launched in the run-up to the trust's annual general meeting on 26 October, which will see investors vote on the continuation of the trust and its proposed sale of a fifth of its portfolio for $465m.
The move also comes after Asset Value Investors, which owns a 5% stake in SONG, urged shareholders to vote against continuation and the proposed sale, which the firm deemed a "truly dreadful" deal.
In today's (19 October) statement, the board said it would be considering "all options" for the future of the trust, including a review of future management arrangements, with the aim of maximising value for shareholders.
Hipgnosis board launches strategic review as continuation vote approaches
Stifel analyst Sachin Saggar wrote in a research note that there was "little point" in the announcement, as it would have likely been announced next week if the continuation vote failed.
"In our view, as investors have such little trust with the existing board, we are not clear how decisions taken by them will have broad support," he wrote. "In practical terms, the strategic review will have to be carried out by their successors.
He also noted that the move "points to desperation given the lack of strong board governance to date".
In a separate note, Numis analyst Ewan Lovett-Turner argued the continuation vote was still "likely to fail" due to the strategic review being "unlikely to placate many investors".
Meanwhile, Winterflood analyst Shavar Halberstadt said it was clear the board was exploring all options to "placate shareholder unrest" ahead of the continuation vote.
He also added the proposed portfolio sale had "failed to quench the market's thirst for blood", resulting in a "flurry of announcements" in an attempt to keep it satisfied.
While Halberstadt said there is a desire for a ‘white knight' external bidder, he noted the pool of potential bidders will have shrunk as the cost of capital has increased.
Asset Value Investors urges Hipgnosis shareholders to vote against continuation
Lovett-Turner added the manager having a right to match pricing of third-party offers was "clearly a deterrent" to others spending the time and money on a due diligence process, making a sale even less likely.
This morning's statement from the board also revealed it had asked its current investment adviser, Hipgnosis Song Management, to remove the call option entitling it to acquire the trust's portfolio on termination, but it had declined.
Halberstadt said this was not surprising, as Hipgnosis Song Management CEO Merck Mercuriadis was unlikely to "let go of the portfolio he has painstakingly composed over the last few years".
This was especially true given the financial backing Blackstone may be willing to provide to take the portfolio private, adding he would "not be surprised" if it was the likely outcome.
Lovett-Turner agreed, suggesting this was "probably not a huge surprise" as the investment adviser was "unlikely to give up something for nothing".
He added: "However, it they were willing to give more flexible terms to shareholders than there may be some hope of salvaging an ongoing relationship, although trust may already have been lost."
Hipgnosis pulls dividend as expected retroactive royalties halve
Saggar noted the manager had not been included in the contact information of the stock exchange notice, pointing to a potential breakdown in its relationship with the board that has "previously been perceived as overly close".
Overall, Numis' Lovett-Turner still said it was "astounding" the fund would be trading at a nearly 50% discount, even as its closest peer, Round Hill Music Royalty fund, just approved its acquisition at an 11.5% discount to NAV.
"Ultimately, this may offer an attractive buying opportunity for an asset class that should produce an attractive, growing income stream over the long-term, but is understandably uncertain when debt covenants are close to being breached and when governance is called into question," he concluded.