As an example of the intersection of wealth, asset management and the sports world, the manager of a fund with a strong footballing allocation is to give talks to the PFA Business School in the UK about investment into the game. This publication also interviews the manager about this programme.

A manager of a fund that puts almost a quarter of assets into sports-related companies, including Ajax Amsterdam and Borussia Dortmund, is to lecture UK footballers on investment. The development shows the growing intersection of money and the “beautiful game.”

Luis García, manager of the MAPFRE AM Behavioral Fund, part of MAPFRE, the Spanish and Latin American insurance group, has been picked by the PFA Business School in the UK to lecture Premier League players on investments into sports.

The development coincides with fresh reminders of the vast sums in the world of professional football. Saudi side Al Hilal has made a €300 million ($331 million) bid for Kylian Mbappe, the French footballer – the largest bid ever. (By a sad irony, that story coincided with news that Trevor Francis, the English footballer who was the first £1 million footballer, had died at the age of 69.)  As if to remind investors about the spread of the sport, the Women's World Cup tournament continues in Australia and New Zealand.

“Now we are starting to see a big wave of investments into sports, but the MAPFRE AM Behavioral Fund spotted this opportunity in advance and started investing into sports already in 2018-2019, being very contrarian at that time, as almost no one in the market was then interested in this opportunity,” García said in a statement. “My talks at the PFA Business School will be focused mainly on why it is interesting to invest into sports and in particular into football: How have the financial control rules transformed the industry? Can football clubs be profitable and pay dividends?” 

“Are financial targets and sporting success opposed or complementary? What are the new ways of investing into football (mainly multi-club ownership)? Could it be interesting for a football club to list in the stock exchange and are there already a few successful case studies? How do we value a football club and when is it attractive from a value investing perspective? Is sports and football a new asset class for value investors?” (Garcia is also interviewed about the programme by this news service. See below.)

Alejandro Cardenas, director of the PFA Business School, Professional Footballers’ Association, collaborated with La Liga and La Liga Business School to create and manage a Sport MBA in Spain.

The Postgraduate Diploma in Global Football Business Management offered by the PFA Business School, is specifically designed to be more focused on the business side of club management than generic Sports MBAs.

The development is also an example of how sports and wealth management cross over. Sportsmen and women, and their managers, agents and others in sports fall into mass-affluent, high net worth and ultra-HNW categories in some cases. Banks can also associate their brands with sports, as in the case of UBS and Formula 1 motor racing. Sports figures can have problems when it come to money management; they have short earnings' "windows," their wealth needs to be managed over the long term, and they can be prey to charlatans.

Interview
WealthBriefing intervewed Garcia about this venture and his hopes for the programme. We started by asking him about the topics he intends to cover.

"My lecture will be focused on investments into the football sector. At the MAPFRE AM Behavioral Fund, we started investing in listed football clubs in 2018, and pushed the thesis that more American investors would probably increase their interest in European clubs. The pandemic was clearly a break, but the positive dynamics were there, so now it seems clear that we were on the right track. As of now, Borussia Dortmund is our largest holding in our portfolio. And we are also minority investors in Ajax, in the Netherlands. We used to be shareholders of Olympique Lyonnais as well, but we sold it in the recent takeover. All these three clubs meet our investment requirements: good business, clean balance sheet and run by excellent capital allocators, and all that at an attractive price. I will be lecturing footballers on why value-oriented investors find the football sector interesting and what are the most recent dynamics, such as multi-club ownership," Garcia said. 

How much demand do footballers and other sports individuals show for such courses?

"Footballers are increasingly interested in knowing more about investing in general, so that they can make better decisions. The 21st century athlete is clearly expanding interests off-the-pitch and they understand that education is crucial to avoid mistakes and take control of the situation. PFA helps players go back to school to prepare for life after football. Actually, at MAPFRE, we also have a podcast where we speak with professional athletes about their interests off-the-field: who they invest their money? Do they have someone to help them with wealth management? Are they also entrepreneurs? We have had really interesting conversations with top athletes, discovering things about them that are generally not so visible to the fans," Garcia. 

With so much money in sport these days – for good or ill – why is a course like this important?

"It is really very important. Footballers have a very specific profile in terms of the time in their life when they receive significant cash inflows. They need to increase their capabilities to be able to pay attention to their finance and prepare themselves for the time when the monthly income is reduced dramatically. But also, increasingly more footballers have other interests off-the-pitch, maybe related to the sports industry but from other roles, and they need to start preparing while they are active," Garcia said. 

"Sports are probably the most overlooked thematic investment globally. In the catalog of different fund managers, we find funds specialised in robotisation, artificial intelligence, population pyramids, etc., but not a trace of sports," Garcia said. "This reality is curious, since the sector has both characteristics that generally attract investors (medium-term visibility, ease of business understanding, and competitive advantages) and clear tailwinds for the coming years. The MAPFRE AM Behavioral Fund, our European equity fund that focuses on the study of market psychology, is heavily exposed to the sports industry to the extent of around 25 percent of its total assets. It is by far the most important sector in our portfolio."

"We are shareholders in companies such as MIPS AB, JD Sports, Technogym, Adidas, The Gym Group and, perhaps most strikingly, two football clubs: Borussia Dortmund and Ajax Amsterdam. European soccer has gone from being a place where it was unthinkable to invest in a rational way to representing, in our opinion, an interesting opportunity for those who are willing to leave their preconceptions behind. We started investing heavily in the space in 2018-2019 and the fund has now around €40 million assets under management.

Garcia said he has been a good friend of Maheta Molango, CEO of the PFA. "We were introduced by a good friend of ours, Julio Garcia Mera, 2x World Champion in futsal and a great guy. From that moment, I have admired Maheta’s work. I have always been convinced that we will play a key role in the future of football. He is extremely smart, honest and passionate about his work. And with a level of preparation that puts him in the best position to lead the new generation of football executives. It is a great pleasure to work with him and Alejandro Cárdenas, the Academic Director of the PFA Business School," he added.