Author: admin

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

US private capital group KKR is in talks to acquire Arctos Partners, one of the pioneers of the private equity industry’s push into professional sports, according to people briefed on the matter.

KKR has accumulated more than $700bn in assets, making it one of the largest players in private capital.

Its interest in Arctos comes as it looks to wealthy individual investors and ordinary retirement savers for future asset growth, making sports investments that attract interest from everyday investors an appealing new product offering.

The prospective deal would also signal KKR’s push into the booming market for second-hand private equity fund stakes, where Arctos’s executives have particular expertise.

Arctos owns stakes in some of the world’s most popular sports teams including European football giants Liverpool and Paris Saint-Germain.

One person with direct knowledge the discussions said KKR was in advanced talks to take a majority stake in Arctos. However, both people cautioned that the negotiations were ongoing and could yet collapse.

Arctos had also fielded interest from other large private capital groups and asset managers, the people said, and any deal would be likely to require sign off from the various professional leagues in which its portfolio teams compete.

Arctos was founded in 2019 by two executives who combined knowledge of sports, entertainment and private equity.

David O’Connor was previously an executive at the owner of the New York Rangers ice hockey team and the talent agency CAA. His co-founder Ian Charles was an early adviser to the now booming marketplace for second hand private equity fund stakes.

Together they have led private equity’s push into sports, buying minority stakes directly in popular sports teams.

In addition to its European football stakes, Arctos owns minority stakes in more than a dozen franchises.

Those include high profile US teams such as the National Basketball Association’s Golden State Warriors and Utah Jazz, the baseball World Series champion Los Angeles Dodgers, and two National Football League teams, the Los Angeles Chargers and Buffalo Bills.

It is also a minority investor in the Aston Martin Formula 1 team.

Arctos, which manages over $14bn in regulatory assets according to securities filings, has also built a business providing tailored debt and equity financing to the private capital industry.

Earlier this year, that unit of Arctos helped to finance the management buyout of private credit firm Hayfin from a Canadian pension fund.

KKR’s interest in Arctos comes as the New York based pioneer of big private equity takeovers has used its substantial cash reserves and valuable stock currency to expand into insurance and debt-based investments.

In 2023, KKR took full ownership of insurer Global Atlantic at a valuation of more than $7bn, its largest ever acquisition. While a price for Arctos could not be established, any deal would be among KKR’s biggest ever.

KKR and Arctos declined to comment.