Investment Strategies
Citi Private Bank's Big Play For Sports Tech Investments

Just in time for the weekend, this story is another example of how sports and wealth management intersect.
Citi Private Bank and leAD Sports - an organization founded by
the Adidas family dynasty - have partnered to work with
entrepreneurs in the space. The move highlights how wealth
managers target sports stars and the industry for branding,
investment and client acquisition purposes.
The private bank said the relationship will help leAD start-ups
to "build faster, stronger and smarter sports
businesses".
leAD is described in Citi's statement today as a "global
powerhouse for sports tech entrepreneurship and investments" and
was established by the grandchildren of Adi Dassler (founder of
the Adidas sports apparel and equipment firm) together with
shareholders who are experts in the fields of venture capital,
business, sports business, and tech. The organization has the
leAD Sports Accelerator, the leAD Business Builder and the
ADvantage Sports Tech Fund.
Citi said it is the first global bank to sponsor leAD sports and
will be leAD’s exclusive private banking sponsor.
Wealth managers' investment in sports hits several targets: it is
an important part of the global economy in its own right; firms
such as UBS, the world's largest wealth manager, also sponsor
sports teams and organizations as part of their branding, and
sportsmen and women, and associated professionals, are often high
net worth individuals. (UBS is a global sponsor of Formula 1, for
example. Separately, according to the Statista website, Bank of
America spent $80 million on sports sponsorship in 2016, more
than any other US bank that year - the latest year for which such
figures are available.)
As an example of another sports-specific investment venture,
earlier this year California-based Sapphire Ventures, a
technology venture capital firm, launched a $115
million platform to back start-ups in the sport, media and
entertainment sectors. The new platform is called Sapphire
Sport.
Sports tech entrepreneurship
leAD Sports focuses on sports tech entrepreneurship and
investments. The organization will have access to Citi Private
Bank’s banking and capital market solutions, along with
investment expertise.
“Adi Dassler delivered world-class innovation in the world of
sport in the 20th century, and now his eldest grandchildren are
aiming to do the same,” Peter Charrington, global head of Citi
Private Bank, said.
Citi Private Bank’s market-leading Sports Advisory & Finance team
has structured and advised on the purchase and sale of numerous
franchises for more than two decades.
Since its first accelerator program in 2017, leAD has enabled 23
early-stage start-ups from 14 different countries. From India to
Ireland to Israel, leAD has supported a diverse range of sports
in both the real and virtual worlds by providing strategic
advice, direct investment and mentorship. Some of the sports
start-ups that have graduated from the leAD Sports Accelerator
Program include German start-up, Wingfield, which has developed a
system that can transform any tennis court in the world into a
smart court; UK-based Who Knows Wins, a start-up set to
revolutionize social betting with a platform that allows friends
and families to compete against each other in leagues on any
sporting event; and Canadian start-up 2020 Armor, a company that
makes electronic chest guards and brings the Street Fighter video
game to life.
Adi Dassler's grandchildren – Horst, Klaus and Stefan Bente
founded the organization. Along with the Bente family, leAD
leaders include Andrew White, leAD chairman; Harold Primat, leAD
board member; and Christoph Sonnen, leAD chief executive and
ADvantage Sports Tech Fund partner.
Sports, media and entertainment industry figures have specific
wealth management requirements of their own, which means that
firms need to build specific offerings. Sports wealth planning,
along with areas such as media and entertainment, is starting to
become a significant segment within the wealth management
industry, with money flowing into NFL football (in spite of some
recent woes in that sport), soccer, tennis, Formula 1 and rugby.
US basketball star LeBron James reportedly was the second highest
paid athlete in 2017, earning around $86.2 million, according to
the New York Post. James earned $31.2 million in salary and
bonuses, and $55 million in endorsements. Golfers, such as Jack
Nicklaus, Phil Mickelson and Rory McIIroy, are some of the
wealthiest individual sportsmen.
Tennis produces millionaires such as Switzerland's Roger Federer
(a brand ambassador for Credit Suisse); motor racing has seen the
rise of millionaires such as F1 motor racing champion Lewis
Hamilton. (Hamilton has been criticized over his offshore tax
planning practices.) Wealth managers are also taking notice,
managing the wealth of stars and using them for branding
purposes. The development of such offerings is also a sign of how
banks and other organizations are trying to develop value-added
propositions in a war for high net worth clients' business,
moving beyond simple segmentation based on assets, for
example.