Alex Rodriguez is looking to raise a massive buyout fund that will invest in pro sports teams in the US and abroad, The Post has learned.
The former Yankee slugger’s nascent private equity fund would aim for minority stakes in pro franchises across US leagues including MLB, the NFL and the NHL, as well as sports teams overseas ranging from soccer to cricket, according to people with knowledge of the fund.
While the hoped-for size of the sports-focused fund couldn’t immediately be learned, a source close to the situation said A-Rod is gunning for a war chest in “the billions.”
That’s despite the fact that Marc Lore, the e-commerce billionaire who has partnered with A-Rod to buy the Minnesota Timberwolves, won’t be participating in the new fund, insiders said.
A-Rod is actively looking to hire management for the fund and has brought in recruiters to help with that effort.
Fundraising is still in the early stages and A-Rod could decide to scrap it at any time, sources cautioned.
“Alex’s successful purchase of the Timberwolves franchise has drawn the interest of large PE firms and institutional investors who are courting him to create sizable PE funds that would invest in the broader sports and real estate universe,” a source with knowledge of the situation told On The Money.
A spokesperson for A-Rod declined to comment.
A 10-figure fundraising would put the A-Rod fund in league with other major players in sports investing like Arctos Sports Partners — a minority owner in the Golden State Warriors that’s reportedly close to raising a $2.5 billion fund — and Gerry Cardinale’s RedBird Capital Partners, owner of the Boston Red Sox and Liverpool FC.
Ares Management, whose founder Tony Ressler personally owns the Atlanta Hawks, also has raised $3.7 billion. Avenue Capital Group CEO Marc Lasry has announced plans for a $2 billion to $3 billion sports fund.
A-Rod is looking to capitalize on professional sports teams’ increasing need for minority investors as their valuations have ballooned.
Within the last few years, the MLB and NBA are now letting owners sell minority stakes in their teams to private equity funds.
NFL team owners are pushing for the league to allow private equity to take minority stakes.
Sources close to the situation noted, however, that A-Rod’s deal to buy the Timberwolves would likely bar his new fund from further investments in NBA teams.
“Alex Rodriguez, A-Rod Corp and Marc Lore are focused on building the Timberwolves and the Lynx franchises and bringing a championship to Minnesota,” a source close to the situation said. “The two are slated to become the majority owners of the franchise next year.”’
A-Rod and Lore ponied up $250 million in July 2021 for a 20% stake.
They increased the stake to 40% on March 28, and will make one more payment taking their stake to 60% over the next year or so, according to sources.
A source with knowledge said A-Rod notes he has a “long history of investing, having first invested in real estate during his playing days.
In addition to the Timberwolves, ARod Corp has more than $5B of real estate investments along with many other venture and PE investments.”
But some of A-Rod’s recent ventures have faced challenges.
His $500 million SPAC, Slam Corp., was unable to complete a merger with sports collectives company Panini.
Shortly thereafter, 61% of investors redeemed their shares, slashing the fund’s value to $224 million.
Credit: Source link
