FSG and Liverpool investor RedBird set for another £2.1billion war chest

RedBird Capital Partners, the US investment fund that owns 11% of Liverpool owners Fenway Sports Group, is returning to the market to raise capital for a fourth fund.

According to US trade analysts BuyoutsNew York-based RedBird last week filed paperwork for its ‘Fund IV’ for new investment, likely in the sports space in which they have become so prolific over the past two years and have grown. carved out a niche, enjoying great success. .

According to the report, ‘Fund IV’ is likely to seek as much as the last funding round the company committed to which closed in March 2021, the same month RedBird closed its investment in FSG, a deal which was worth $750. m and gave them an indirect investment in Liverpool, the Boston Red Sox, RFK Racing, NESN cable TV and, most recently, the Pittsburgh Penguins NHL ice hockey team.

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The $750 million investment, based on Forbes’ analysis of the overall value of the FSG empire earlier this year, where it ranks third most valuable in world sport, is potentially worth more than a billion, a figure that will likely only increase given the plans to accelerate the growth of FSG’s portfolio through the acquisition of more sports teams and other investments, as we have seen last year with the investment in basketball icon LeBron James and business partner Maverick Carter’s SpringHill Entertainment business. James and Carter became full partners of FSG in March last year after the RedBird deal was completed.

RedBird is currently involved in the race to take over the reins of Italian giants AC Milan, the company founded by New York managing partner and financier Gerry Cardinale in 2014, facing competition for the Serie A club from the fund. Bahraini investment Investcorp. RedBird, who ECHO say will maintain their long-term commitment to their FSG plan regardless of what happens with the AC Milan bid, have reportedly offered just over $1 billion for the team, a 100% equity deal, something that’s different than Investcorp’s which was made up of part equity, part debt and bridge loans.

RedBird already own French second division side Toulouse and have overseen the team’s return to Ligue 1 for next season after acquiring them in 2020 just after their relegation from French football’s top division. They also own a stake in Indian Premier League cricket team Rajasthan Royals, are co-owners of the soon-to-be-relaunched XFL in the US alongside Hollywood actor Dwayne Johnson and a small stake in the Spanish team Malaga who could come forward in full ownership should a legal dispute between the current owners settle in court.

RedBird’s latest funding round will likely target the sports space again, with Cardinale believing that many opportunities lie in the industry through vertical investing, becoming the rights holder and taking a hands-on approach to investing. using expertise. RedBird has become one of the most active investors in the sports industry, actively seeking growth opportunities for the groups and teams where they place their capital, as opposed to some more traditional passive investors who continue to operate in the space.

Acquiring more teams is part of the RedBird plan, as is investing more capital in FSG, which Cardinale has already hinted at.

Cardinale, who had previously not ruled out having to Liverpool in the future – although stressing that was not the intention of his original deal with FSG, nor was it part of any grand plan – spoke about what that the “second year” could have in store for both him and FSG in a revealing interview with the Boston Globe back in March.

Cardinale told the Globe: “I’ve been watching them for 20 years now – which is so funny, isn’t it? – we were looking at the same assets. Here I am 20 years later, where we all are went together with It cost me a lot more, but I still have the belief.

“It’s all on the line I would say. I would be very disappointed if I didn’t significantly increase the amount of capital we have invested in Fenway to date for more opportunities. I hope and believe we will having that is what buying on this platform should be.

“We now have a real place at the table and an ability to influence decisions. But we know that this investment thesis was not that we come in and do nothing but play a supporting role, and I’m totally ok with that It’s rare I haven’t done that much but I sure would in this case because these guys are world class and it’s a privilege to be in the same room as them.

“The bar has never been higher in terms of what really fits into the portfolio (FSG).

“You should think we’re looking to add other teams and the businesses around them, you should see us building businesses within the platform itself, like I did in my career at RedBird and Goldman (Sachs), and you should look at continuing to assess builds.

Edward K. Thompson