Sports Investing
A lot of news around sports investing as of late. We have compiled a few highlights with links to YouTube videos.
Morgan Stanley offers fan an avenue to invest in sports, private equity in niche sports, Avenue Capital $1.5B fund, Lead: Locker Room Fund.
Morgan Stanley offers fans an avenue to invest in sports
High-net-worth sports fans can now invest in an index of companies tied to their favorite league.
An offering from Morgan Stanley requires a minimum investment of $250,000.
Other top Wall Street firms have launched sports investing strategies as well.
Sports fans with money to spare can now reap returns from their favorite leagues thanks to a new investment offering from Morgan Stanley
The Parametric Custom Core Sports League strategy is a portfolio that allows high-net-worth fans to invest a minimum of $250,000 in an index of companies tied to major sports leagues.
The companies comprise a select group of large-cap US stocks with the biggest sponsorship, media, or ad partnerships with each major sports league.
The offering involves 13 of the biggest sports leagues, from the NFL and NBA to the US Open and Formula 1. It also includes Men's and Women's Division I College Basketball
The bank's wealth management arm announced the new portfolio on Thursday, citing a big opportunity to capitalize on fans seeking more engagement and investment with their favorite sports.
Private Equity in Niche Sports
Traditional sports like soccer still dominate the private equity investment narrative, but in recent years, lesser-known sports such as padel and volleyball have captured investors’ interest.
Niche sports are often characterized by their passionate fan bases and potential for explosive growth. With fewer financial resources historically allocated to these sports, PE sees an opportunity to capitalize on its untapped potential.
Three main reasons for investing in sports: valuable media contracts; additional revenue-generating assets like venues, real estate and live events; and scarcity value—the fewer options there are for potential buyers or participants in a market, the more valuable those options become.
“Sports sit at the intersection of two interesting vectors for investors: live events and owned intellectual property.
The abundance of PE appetite for sports as a whole has pushed firms to venture into more niche areas.
CVC Capital Partners, for example, invested $300 million in the International Volleyball Federation in 2021, which has since transformed into what is known as Volleyball World.
This investment led to the introduction of new competitions, such as the Volleyball Nations League, which greatly boosted the sport’s popularity.
Padel, a racket sport similar to tennis on an enclosed court that originated in Mexico, has also not gone unnoticed by PE firms.
Qatar Sports Investments acquired the professional padel league, World Padel Tour, in 2023 from its organizers, Damm, unifying the professional padel tour under the new name Premier Padel, governed by the International Padel Federation.
MCH Private Equity also invested in the sport, through its Spain Oman Private Equity Fund, financing All For Padel—an Adidas-licenced equipment brand.
Avenue Capital $1.5B Sports Fund
Avenue Capital’s $1.5B Sports Fund, Backed by Star Athletes, Targets High-Growth Franchises
Avenue Capital Group, in collaboration with GAM, has launched the $1.5 billion Avenue Sports Opportunities Fund in Australia and New Zealand.
This fund, which targets premium sports franchises, emerging leagues, and underfunded areas, is supported by an Athlete Team including NBA star Stephen Curry, footballer Harry Kane, and WNBA player Candace Parker. These athletes bring unique industry insights, helping Avenue identify strategic investments across the evolving sports landscape.
According to Marc Lasry, Avenue’s co-founder and former Milwaukee Bucks owner, “The sports industry provides stable growth and long-term value.” Lasry’s track record—transforming the Bucks into NBA champions and selling his stake for 6.4 times his initial investment—adds credibility and connections that benefit the fund’s sourcing and investment strategies.
The appeal of sports franchises is supported by strong financial performance. Between 2002 and 2022, the average compound annual growth rate (CAGR) for the “Big 4” U.S. leagues (NBA, NFL, MLB, and NHL) was 11.2%, outpacing the S&P 500’s 7.7%. The NBA led with a 13.6% CAGR, and the average franchise valuation now sits at $1.28 billion, showcasing why sports have become a coveted asset class. Additionally, sports assets have fewer down years and lower volatility compared to traditional investments, making them attractive targets.
Lead, Locker Room Fund
LEAD, a Berlin, Germany-based venture corporation for sports and health, announced that Harry Kane, Brooks Koepka, Brayden Schenn and other athletes are amongst the first to have joined its Locker Room fund.
Founded by LEAD, Locker Room serves so-called athletepreneurs – professional athletes who are interested in entrepreneurial pursuits and business ventures – by presenting them with vetted opportunities to invest. From global athletes to institutional experts, Locker Room’s ecosystem is designed to surface premium investment opportunities.
Locker Room is an eight-figure fund of more than 20 shareholders actively involved in a select investment community. Its portfolio includes Eastside Golf, the apparel brand that is driving change in making golf more inclusive and appealing to young people; TMRW Sports, a company focused on building technology-focused ventures that feature progressive approaches to sports, media, and entertainment, founded by Tiger Woods, Rory McIlroy and Mike McCarley.
Locker Room is the newest of LEAD’s four funds, which also include LEAD ONE (pre-seed), Lake Nona Fund (seed) and ADvantage (Series A).