Wednesday, 23 July 2014
Last updated 4 hours ago
Nov 1 2011 | 12:58pm ET
The European debt crisis has opened an unusual opportunity for a growing number of hedge funds: investing in European soccer players.
At least three such funds exist, financing teams' acquisitions of players in exchange for a cut when those players are once again sold on the transfer market, Bloomberg News reports. Unlike in the United States, where, for instance, baseball strictly limits the amount of money that changes hands when a player is traded, in Europe teams are free to sell their talent to the highest bidder. And investors are permitted to finance those transfer until international soccer rules, although the U.K.'s Premier League banned the activity after a 2007 scandal.
Portugal's Banco Espirito Santo has run its fund since 2009. The Benfica All Stars fund, which finances acquisitions by Lisbon's S.L. Benfica, posted a 64% return on one resale, that of Angel di Maria to Real Madrid last year. All told, the fund has owned stakes in 24 Benfica players.
Teams, including Atletico Madrid, Turkey's Besiktas, Spain's Getafe, Real Zaragoza and Sporting Gijon have turned to hedge funds as banks become increasingly wary of financing player acquisitions. But the move comes at a price, as player transfers are a major revenue stream for many European clubs.
In addition to Espirito Santo, London-based Doyen Capital and Quality Sports Investments, a joint-venture between Creative Artists Agency and athletic agency Gestifute SA, also offer teams financing, frequently as part of sponsorship agreements.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…