Apollo Launches $5bn Sports Fund, Eyes Major League Stakes

Apollo plans to launch a $5bn sports investment vehicle as private equity firms continue to enter the sports sector. The New York-based investment giant manages more than $800bn in assets and considers this move its first permanent capital allocation to sports.

The company has already established its presence in sports investments actively. They provided an £80m loan to Premier League side Nottingham Forest and a £40m loan to football agent Kia Joorabchian’s Sports Invest Holdings with a 10.25% interest rate. The apollo sports fund’s expansion coincides with major private capital groups showing increased interest in sports markets. The firm might invest in Atletico Madrid, and this deal could value the Spanish soccer giants between €2.5 billion and €3 billion. Private equity firms now recognize sports as an underserved sector that mainstream lenders have overlooked. These firms can deploy funds quickly and secure high yields in return.

Apollo Launches $5bn Sports Fund for Permanent Capital

_{Image Source: Sportico.com}

Apollo Global Management, listed on the New York Stock Exchange, plans to create a $5bn permanent capital vehicle for sports investments. This move shows a radical alteration in the company’s approach to the growing sports sector. The financial powerhouse, which managed $840bn in global assets at the end of June, aims to build a long-term capital base that enables sustained investment in sports without the usual private equity exit timelines.

The fund will focus on giving long-term strategic capital to sports leagues and clubs. The strategy has room to acquire equity stakes in teams, though this won’t be the main focus. Apollo intends to boost its sports finance capabilities by bringing in new team members dedicated to this initiative.

This marks Apollo’s first permanent capital allocation in the sports sector. The structure lets Apollo make investments with extended time horizons that better match the multi-decade investment cycles common in sports franchises and leagues.

Apollo has already tested its sports financing approach through several deals. The company gave an £80m loan to Premier League club Nottingham Forest with the club’s stadium as security and a £40m loan to football agent Kia Joorabchian’s Sports Invest Holdings at 10.25% interest. The investment giant has also talked with Atlético Madrid about possibly taking a stake in the Spanish club.

Major asset managers continue to flock to the sports finance sector. Traditional lenders have left gaps in this market, which creates opportunities for private capital to deploy funds quickly while securing attractive yields.

Apollo Targets Equity Stakes and Lending in Sports Leagues

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Apollo, the private equity giant, we targeted two main areas in sports financing: lending to leagues and teams and acquiring strategic equity stakes. Apollo has already built a 5-year old foothold in European football through several major deals. The firm extended a £40m loan to Sports Invest Holdings at a 10.25% interest rate, following the Nottingham Forest transaction.

The firm’s ambitions stretch beyond lending. Apollo discussed financing options with Atlético Madrid about their Cívitas Metropolitano stadium’s major redevelopment project. This “Sports City” development aims to create a mixed-use shopping and leisure area. The firm also thought over backing bids for Manchester United and reached a $1.25bn agreement with Mexico’s football league, though the deal ended up falling through.

Apollo now sees potential in the player transfer debt market, where loans get secured against future transfer fees. This market grows faster as player transfers reached $4bn this summer alone.

The investment approach puts Apollo in a sector that mainstream lenders have largely ignored. This strategy helps Apollo deploy capital quickly and secure high-yield returns. The permanent capital structure matches perfectly with sports franchises’ multi-decade investment horizons.

Apollo Joins Private Equity Rivals in Sports Investment Race

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Apollo’s entry into sports finance puts them in a competitive field where several 2-3 year old private equity firms have already made their mark. Ares Management raised $3.7 billion for its first sports fund in 2022 and now owns parts of the Miami Dolphins and other teams. Arctos Partners bought a 10% stake in the Buffalo Bills just recently, which values the team at $5.3 billion.

CVC Capital Partners stands out as a major player with its sports portfolio now worth more than £9 billion ($12.1 billion). The company’s investments span across LaLiga, French soccer’s Ligue 1, and rugby’s Six Nations. CVC plans to bring these investments under one roof called SportsCo to get better financing rates for future deals.

Investors now see sports as a unique opportunity. Sports teams generate steady, predictable income even when the economy slows down. The NBA’s new 11-year $76 billion media rights deal shows how these investments can lock in long-term revenue.

The competition for sports assets keeps growing faster. PE firms now look beyond team ownership and focus on player transfer debt markets and sports-related businesses. The NFL’s rules limit PE ownership to 10% and require firms to hold investments for at least six years. Yet institutional money keeps flowing into this growing market.

Apollo has launched a $5bn permanent capital vehicle to finance sports investments. This move marks a revolutionary change in the private equity world. The investment giant stands out by using a permanent capital structure that matches the decades-long investment cycles in sports. Their strategy shows how sports have become an attractive asset that delivers steady revenue streams in any economic climate.

The company plans to both lend money and buy strategic equity stakes. Apollo already has a strong presence in European football through its deals with Nottingham Forest and Sports Invest Holdings. Recent talks with Atlético Madrid show the company’s bigger plans in this market.

Major financial players are drawn to sports investments. Broadcast rights, ticket sales, and merchandise create reliable income even when the economy slows down. The NBA’s new 11-year $76 billion media rights deal proves how these investments can guarantee long-term revenue.

Private equity firms now compete harder for sports assets. Apollo joins other big names like Ares Management, Arctos Partners, and CVC Capital Partners. Each company creates unique ways to handle league ownership rules and grab new chances in sports.

Apollo’s $5bn sports fund shows both a smart move to diversify and a key milestone in sports financing’s rise. Their permanent capital structure creates a new model for long-term investment that could change how big investors look at sports properties. This move shows not just Apollo’s dedication to sports but could start a new era between private equity and professional sports worldwide.