Apollo Global Management is planning to start a $5 billion sports investment fund—the first time the New York-based firm has allocated permanent capital to the sector.
According to the Financial Times, which first reported the new vehicle, Apollo will hire new people to lead the strategy, including investments in sports leagues and teams.
Apollo has been increasing its exposure to the sports sector. Earlier this year, it made a loan of £80 million (about $109 million) to Nottingham Forest Football Club—its first financial foray into the English Premier League.
In July, Apollo was also reported to be in talks with Atlético Madrid to acquire a minority stake in a deal that would value the Spanish club at up to €3 billion (about $3.5 billion).
Private capital has been active in European football for some years, and its participation is only growing.
According to a recent PitchBook analyst note on private capital in European football, most clubs in the English Premier League now have PE, VC, or private debt involvement. Among Europe’s “Big Five” leagues, 36.5% of clubs have some form of private capital participation—whether majority or minority stakes—up slightly from 35.7% two seasons ago.
Read more: Every PE connection to Europe’s top football clubs
Women’s football is also drawing investment. In late August, West Ham United was reportedly in advanced talks to sell a stake in its women’s team to Monarch Collective, a Los Angeles-based investment fund focused exclusively on women’s sports. The deal would value the London side at around £55 million.
However, exits remain challenging across all sectors, including sports. CVC Capital Partners has struggled to find buyers for some of its sports assets, such as English Premiership Rugby and its stake in French football.
The Luxembourg-based firm plans to consolidate those holdings under a single £9 billion entity, SportsCo, to leverage scale and secure cheaper financing for further investments.
Despite market headwinds, PE’s interest in sport is growing, and with big-name players like Apollo coming onto the pitch, competition for prize assets is only likely to intensify.
Featured image by Dan Istitene/Getty Images
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