Sports-focused private equity firm Arctos Sports Partners has raised $1.1 billion for a second investment fund, bringing the company’s total assets to more than $5 billion.
Arctos closed the first fundraising this week, according to an email sent to clients today by Evercore, a distributor of investment funds to institutional investors. The new fund, Arctos Sports Partners Fund II, includes additional investments from about half of the company’s clients in the original fund, according to the email. Arctos is targeting a total of $2.5 billion in capital for the second vehicle. A spokesperson for Arctos declined to comment.
Two weeks ago, Arctos revealed in an annual filing that its first fund closed 2021 with $3.94 billion in assets. The Dallas-based private equity firm, co-founded and led by Ian Charles, has been a prolific investor of institutional assets to invest in sports. The company launched in the fall of 2019 and raised over $400 million in its first six months, then doubled that number on its first anniversary.
The first Arctos fund has made 25 investments in 18 franchises, according to the email sent to clients. Sportico reported that the company has stakes in half a dozen MLB teams, including Fenway Sports Group, the parent company of the Red Sox, English football’s Liverpool FC and the NHL’s Pittsburgh Penguins, two franchises of the NBA, including the Golden State Warriors, hockey’s Wild and Lightning, MLS’s Real Salt Lake and Elevate Sports Partners. According to Evercore’s email, “every investment in a franchise exceeds baseline expectations as the sports industry has rebounded from the COVID-19 pandemic much faster than expected.”
Arctos’ primary strategy is to buy minority stakes in professional sports teams, companies that have historically appreciated faster than stocks but have traditionally only had individual partners. Most leagues have opened their ownership ranks to private equity funds like Arctos to support growth in team value and provide sponsors with a market to sell their stakes.