Apollo, Ares eye bigger role backing sports leagues, teams
Apollo has already signed a number of sports deals through existing pools of capital, including issuing loans to football teams such as Nottingham Forest.
NEW YORK – Apollo Global Management Inc. and Ares Management Corp. are both pushing deeper into sports investing, the latest multibillion-dollar alternative asset managers to put more money into the booming sector.
Ares has begun talking to investors about a new media and entertainment fund designed for individuals, a departure from the traditionally exclusive nature of sports finance. The semi-liquid fund will target both debt and equity investments across sports leagues and businesses.
Meanwhile, Apollo is considering creating a permanent capital vehicle dedicated to sports finance, a structure that would allow for longer-term and strategic investments in the industry. The fund would primarily lend to professional sports teams and leagues, with the option to take equity positions.
Alts managers like Ares and Apollo have been pouncing on opportunities to invest in sports teams, boosted by the National Football League's landmark decision last year to allow private equity firms to own teams.
In May, Bloomberg reported that a group of professional sports team insiders, including billionaire Dallas Mavericks minority owner Mark Cuban, were launching a private equity fund aimed at taking small stakes in pro sports teams.
Arctos Partners, CVC Capital Partners and Ares have also been investing in leagues and teams, while Elliott Management Corp. and Oaktree Capital Management took ownership of football clubs after owners defaulted on their loans.
The Ares fund will align with its push to reach individual investors and came in response to growing demand from financial advisers seeking to expose their retail clients to the asset class.
Ares aims to capture US$100 billion in assets from individual investors by 2028, an area that makes up 8% of its US$546 billion asset base.
If successful, the initiative could generate an estimated US$600 million in management fees, it said.
Los Angeles-based Ares has also been ramping up its investments in sports, buying stakes in the NFL's Miami Dolphins and other teams and closing its first fund dedicated to the strategy in 2022 with US$3.7 billion.
Meanwhile, New York-based Apollo has already signed a number of sports deals through existing pools of capital, including issuing loans to football teams such as Sporting Lisbon and Nottingham Forest.
'While sports teams, clubs and leagues often draw much of the attention, we believe the broader potential ecosystem of sports, media and entertainment investing is significant and underpenetrated,' Ares has said on its website.
The firm has estimated the total investment opportunity in 'adjacent strategies' could be as much as US$2.5 trillion. BLOOMBERG
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