Who Are The Private Equity And Hedge Fund Players Buying Up Stakes In Sports Teams? Here Are The Big Names To Know

As a sports fan (I'm a die-hard Manchester United fan for those who follow Premier League soccer or "soccer" for us Americans) I've always paid attention to who's on which team or what. Shares acquired by the company or administrator. After all, money can have the power to influence how teams work. In recent years, a group of investors including alternative asset managers (private equity, venture capital and hedge funds) have been actively investing in sports. But who will buy machinery parts?

My colleague Luisa Beltran rolled up her sleeves and began researching, and, as she notes in her latest report, she found 120 "sub-managers" investing in sports equipment. As Louisa wrote:

According to the Fortune analysis, which looked at about 153 team websites and media guides, as well as spoke to investors and league officials, about 120 assistant managers are involved with sports franchises . Some notables include Steve Cohen, chairman and CEO of hedge fund Point72, who bought the New York Mets baseball team in 2020 for $2.4 billion; Apollo Global Management co-founder Josh Harris, who led a group of investors to buy the Washington Commanders, formerly the Washington Redskins, for a record $6.05 billion in May ; and Marc Lassory, CEO of Avenue Capital Group, who sold his 25% stake in the Milwaukee Bucks in April.

Among those flying under the radar is Justin Ishbia, founder of Shore Capital, the private equity firm that owns Nashville SC.

There are many great drivers who have shown interest in sports teams. As Louisa specifically says:

The rise of alternative executive ownership is, of course, due to the extraordinary returns that alternative companies have achieved in their day-to-day operations over the past 25 years. For example, according to a 2022 World Economic Forum study, private equity funds delivered an annualized return of 14.8% over the 25 years ending in December 2020, compared to 5.76% produced by the S&P 500 over the same period . like _

Louisa writes that the last major sports deal came in June, when Michael Jordan agreed to sell his majority stake in the Charlotte Hornets basketball team. The investor buying team included Gabe Plotkin (of Melvin Capital and StockMem fame) and Rick Schnall, partners at Clayton, Dubilier and Rice PE firms; Chris Shumway, former CEO of Tiger Management and current managing partner of Shumway Capital; and Dan Sundheim, founder and CIO of D1 Capital Partners. He is part of the former Ian Loring team at Bain Capital (now at Haveli Investments, according to LinkedIn).

Some investment funds are also looking at sports contracts.

Some of the biggest funds investing in sports are Dial Homecourt Partners and Arctos Sports Partners, part of Blue Owl Capital. This year, Arctos went public with its second crowdfunding, raising more than $2.2 billion against its $2.5 billion goal. Artcos acquires passive minority stakes in professional sports teams; He owns an interest in the Tampa Bay Lightning and owns the Utah Jazz basketball team and the Real Salt Lake soccer team through Smith Entertainment Group.

There are certain factors related to sports that make teams a good bet for investors. As Louisa reported:

One reason for all the deals, bankers and private equity executives say, is rising prices. The $6.05 billion the Chiefs received surpassed the $4.65 billion the Denver Broncos received last year when they sold Rob Walton to the Walmart heir ... "What's the last sports car to sell a team at a loss? I don't even know," said Jeff Klein, clerk at the Gueron Reisbaum law firm. An attorney, advising clients in the sports and entertainment industry.

... Contracts between sports teams are resilient to market fluctuations, said Sal Galatioto, president and founder of Galatioto Sports Partners (GSP), a sports firm that advises on team acquisitions. The number of U.S. mergers and initial public offerings has dropped significantly this year due to the stock market crash, but not sports deals. "I've never seen the level of demand we're seeing now, and I think it's going to continue," said Galatiotto, who teaches sports finance at Columbia University's Graduate School of Business .

See the full list of 120 sub-owners in a full story here.

New funds for hug faces? AI modeling platform Buzzy Hugging Face is on track to raise a Series D round that could be worth at least $200 million, Forbes reported late last week. The startup recently raised $100 million last spring and is backed by Lux Capital and Sequoia Capital. Hug Face provides a space for developers to explore open source AI models According to Forbes , Ashton Kutcher's venture capital firm Sound Ventures is leading the latest round. Hug Face did not respond to Fortune's request for comment by press time.

see you tomorrow,

Anne Schrader
Twitter: @AnneSraders
Email: anne.sraders@fortune.com
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Jackson Fordyce handles the offers section of today's newsletter.

determination

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- CarePredict , a leading healthcare provider based in Plantation, Florida, has raised $29 million in Series A funding led by SV Health Investors and Aspire Healthcare Partners' MedTech Convergence Fund .

- Los Angeles-based mobile experience engineering services provider Embrace has raised an additional $20 million in funding. NEA led the round and was joined by Greycroft , AV8 and Eniac .

- Switzerland-based Web3 gaming platform Zug and publisher Xterio have raised $15 million in funding from Binance Labs .

- Efficient Capital Labs , a New York-based provider of venture capital for B2B SaaS companies, raised $7 million in pre-Series A funding. QED Investors led the round and was joined by 645 Ventures , The Fund , Lorimer Ventures , Riverside Ventures and Generalist _

Personal medical assistance

- Aero Global has acquired London-based investor Blue Current Capital . Financial terms were not disclosed.

- The Vertex Company , a portfolio company of Wind Point Partners, has acquired Chicago-based business consulting and advisory firm Breakwater Forensics . Financial terms were not disclosed.

other

- Greenfly has acquired Miro AI , a content services platform for the sports industry based in Grand Haven, Michigan . Financial terms were not disclosed.

Fund + Fund Fund

- Cleveland-based The Riverside Company has raised $350 million for a fund to select investments in companies with revenues between $60 million and $300 million.

race

- Crossbeam Venture Partners , a New York-based venture capital firm, promoted Ryan Morgan to partner.

Warren Buffett: Private equity firms are often very dishonest