Apollo Set to Launch $5B Sports Investment Vehicle

(Bloomberg) — Apollo Global Management Inc. is poised to launch a $5 billion strategy to invest in sports deals, marking another major asset manager targeting the booming sector.

The New York-listed private capital giant, which had $840 billion of global assets under management by the end of June, is planning on building a permanent capital-base for the fresh effort, according to a person with knowledge of the matter. Bloomberg first reported the plans in July.  

Apollo’s strategy is set to specialize in lending long-term strategic capital to sports leagues and clubs. It will also consider owning stakes in teams, though this wouldn’t be a priority, and may hire new staff.

The FT reported on the size of the vehicle earlier on Tuesday.

Apollo has already provided loans to football teams including Sporting Lisbon and Nottingham Forest, and earlier this year held discussions with Atlético Madrid, Spain’s third-biggest football club, to help finance a major redevelopment project. Atlético is developing a so-called Sports City around its Cívitas Metropolitano stadium, creating a mixed-use shopping, supermarket and leisure area.

The fast-growing sports finance sector is attracting investment managers who are seeking returns via a number of strategies, from investing in teams to structured lending. 

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Firms like Arctos Partners, CVC Capital Partners, and Ares Management Corp. have been actively investing in sports leagues and teams. Additionally, Elliott Management and Oaktree Capital Management have acquired ownership of football clubs following loan defaults by previous owners.

Ares has also begun talking to investors about a new media and entertainment fund designed for individuals, a departure from the traditionally exclusive nature of sports finance, in response to growing demand from financial advisers seeking to expose their retail clients to the asset class. 

Major asset managers are also drilling down to smaller, more esoteric corners of sports financing. With spending on players smashing $4 billion this summer, major institutional investors are looking at the debt market that uses the players’ transfer fees as collateral, traditionally home to smaller investors. Apollo and Blackstone Inc. are the latest to look at funding deals, Bloomberg reported last month.