Kicking Off Creative Sports Investing

Robbie Lawther

15 February 2018

WealthBriefing has interviewed a number of financial institutions over the last year, including Coutts, RBC WM and Brown Shipley, on the topic of sports wealth planning, and what they do for their sports clients. But now this publication is examining innovations around sports investing, an area starting to take shape in the UK and across Europe.

Wealth managers are increasingly aware of how sportsmen and women - and their agents and managers - are valuable clients, part of a trend of firms segmenting customers along occupational lines and distinct sources of wealth. At the same time, it appears that making money in sports teams is an area gaining momentum, tapping into models such as crowd-funding and direct lending that have gained traction as conventional bank finance has tightened up post-2008.

An example new funding models is , the London-headquartered sports investment platform that won UK clearance from the UK's Financial Conduct Authority in 2016. It has been involved with crowd-funding two football teams, English Football League side Stevenage and Italian Seria B club Frosinone Calcio, to fund investments of £600,000 ($848,000) and €1.5 million ($1.87 million), respectively.

The firm’s chief executive, Fausto Zanetton, spoke to this publication about how to invest with the platform, and how high net worth and ultra-high net worth individuals can get a return on investments into their favourite football teams.

“We enable retail investors to invest to our platform into sports opportunities, which take the form of mini-bonds or equity,” Zanetton said. “We structure the fund raises for football clubs, with things like documentation, making sure that from a due diligence point of view everything works. Investors go through a self-certification process after which they can invest online. Typically investments start at £500-£1,000, but there is no real upper limit, so high net worth investors can invest in the raises. The raises are based on an offering/memorandum, which are detailed so investors can make the right decision.”

What comes clear is that for sports investors, making money is only part of the equation: passion for sport is also a motivator, a parallel with the idea of "impact investment" now seeing growing interest from people looking to achieve social, environmental and governance outcomes by putting money to work.

“First and foremost it in relation with the club will find out about it through them. We are building a database of people amongst rich and UHNW individuals that are aware of our raises, and as we grow we will target them specifically.”

The area of sports investing is one expected to take great strides over the next few years, as UBS recently said in its' latest Bilionaires report that “the emergence of great wealth is paying dividends for sports clubs globally – not just in the US and Europe, but also in the Middle East, Asia, Latin America and Africa. Aside from philanthropy, these is an area where Billionaires are having the greatest impact on society".