Arctos Partners, a prominent private equity group specializing in sports team investments, has announced the successful closing of its second sports team investment fund, amassing over $4.1 billion. This significant capital raise, finalized on Tuesday, underscores Arctos Partners’ growing influence and expertise in the sports investment sector.
“Our founding vision for Arctos was to establish a firm that would be the preferred partner for the most sophisticated ownership groups globally, those with ambitious growth plans and a commitment to enhancing the fan experience,” stated Arctos co-founder Ian Charles. In a recent interview, Charles emphasized, “We also aspire to be the partner of choice for institutional investors seeking to invest in this uniquely compelling asset class. This successful fundraise marks a crucial milestone, affirming our success in achieving these goals for both ownership groups and investors.”
Launched approximately two years prior, Arctos’ second sports fund quickly gained momentum, initially securing a billion dollars with participation from half of the investors from its first fund, as previously reported by Sportico. Currently, around 30% of the second fund’s capital has been deployed across a diverse portfolio of sports assets. Notable investments include a stake in the Utah Jazz, an increased investment in Harris Blitzer Sports Entertainment (HBSE), which owns the New Jersey Devils and Philadelphia 76ers, participation in Paris Saint-Germain F.C., and a strategic investment in the Aston Martin Aramco Formula 1 Team.
The composition of the second fund’s investors reflects a broad spectrum of institutional capital, including pension funds, retirement systems, endowments, insurance companies, and global family and wealth investing offices. “The heightened attention and focus on the sports investment space have enabled us to expand our reach internationally,” Charles noted. “There’s a noticeable surge in global interest in North American sports compared to just a few years prior.”
Coupled with its initial sports fund, Arctos Partners now manages approximately $7 billion in assets dedicated to sports team investments. The firm’s investment strategy centers on acquiring minority stakes in professional sports teams and related sports businesses, positioning themselves as strategic partners rather than controlling owners.
The increasing acceptance of institutional investment in professional sports ownership is a relatively recent development. Within the last few years, most major professional leagues have begun to permit institutional investors to acquire ownership stakes in their franchises. This shift is partly driven by the substantial appreciation in franchise values, making team ownership an attractive asset class for larger investment entities. Leagues such as the NBA, MLB, NHL, and MLS now accommodate various levels of fund ownership, although the NFL currently maintains restrictions.
Across its two funds, Arctos Partners is believed to have built a portfolio encompassing investments in 23 sports and esports teams, alongside stakes in an additional seven sports-related enterprises. These include prominent entities such as Elevate Ventures and the Golden State Warriors.
“We are immensely proud to be the first NBA club to partner with Arctos,” remarked Golden State Warriors owner Joe Lacob in a statement to Sportico. “They have proven to be an exceptional partner to me, the Golden State Warriors organization, and the broader league. With this new fund and expanded resources, we and other teams can anticipate continued growth through their strategic partnership.” Arctos currently holds approximately a 13% stake in the Golden State Warriors franchise.
While Arctos Partners has attracted a growing number of international investors and may consider investments in global sports brands outside of North America, as demonstrated by their investment in PSG, the firm’s primary focus remains on the North American market. “A significant part of our efforts has been dedicated to educating the institutional investor community about the unique and compelling attributes of North American sports,” Charles explained. “These are intellectual property-rich businesses, effectively royalty businesses, with a global customer base, long-term revenue streams, and fundamentally attractive business models that are not easily accessible for institutional investors through other avenues.”
Beyond its focus on sports, Arctos Partners has also expanded its investment scope to the private equity sector itself. Last year, the firm introduced Arctos Keystone, a similar investment model focused on acquiring limited partner stakes within the private equity industry, demonstrating the firm’s adaptable and innovative approach to partnership and investment across different asset classes.
