German bank Donner & Reuschel has launched a new investment fund which is aiming to take advantage of the long-term growth trend in global sports and invest in media rights, private equity and real estate.
Few other business sectors have grown as fast in recent years as professional sports. In football, for example, both the value of the European professional clubs and the prices for broadcasting rights have increased by around 9% per annum since the turn of the millennium. Investors can now participate in this billion-euro business for the first time.
The fund will invest in the commercial areas of sports with a focus on football and entertainment rights. For example, this includes broadcasting rights, equity investments in clubs and equipment suppliers, and sports properties such as stadiums and training centres for top athletes. Donner & Reuschel is assuming the role of both the custodian and the exclusive sales partner, while HansaInvest is acting as the capital management company. In the medium term, the fund is looking to raise EUR200 million. The minimum subscription amount is EUR1 million. The target return at the fund level (IRR) is 8% per annum before costs, and the duration of the fund is until the end of 2028.
“The sports and entertainment sector will further benefit from digitalization, as media rights, data and eSports are the big growth drivers of the future,” says Martin Wolf, who acts as an advisor to the fund together with Robert Niemann, both from Sports Advisory International in Munich, Germany.
“With this innovative idea, we are giving investors access to a brand new asset class that was previously only available to private equity firms and corporations,” adds Thomas Ronfeld, head of Primary Markets at the bank Donner & Reuschel.
The newly launched sports fund invests in a non-correlating asset class combined with a unique growth industry.