The Middle East’s biggest alternative asset manager was said to be in exclusive talks to buy Italy’s AC Milan, the seven-time European soccer champion once owned by former Prime Minister Silvio Berlusconi.

Investcorp, which has among its shareholders Abu Dhabi sovereign fund Mubadala Investment Co., is in discussions with Elliott Management Corp. to buy the iconic club for an enterprise value of 1 billion euros ($1.1 billion), according to people familiar with the matter. Representatives for Investcorp, Elliott and AC Milan declined to comment.

Elliott Management took control of AC Milan in 2018 after previous owner Li Yonghong of China defaulted on debt obligations.

From major teams such as Chelsea in England to teams with a smaller international following, such as Standard Liege in Belgium and Genoa in Italy, Europe’s soccer clubs are in the crosshairs of investment firms seeking stable returns. Broadcasting money continues to pour into the sport and, with the World Cup showcase taking place this year, more deals are likely.

Investcorp has been expanding holdings from the U.S. to Asia in a drive to boost assets under management to $100 billion, from about $40 billion currently. The fund delisted from the Bahrain stock exchange last year after almost four decades in a move it said would give it the agility to expand faster. Mubadala acquired a 20% stake in Investcorp in 2017.

Since he took over Investcorp in 2015, Executive Chairman Mohammed Alardhi has launched a growth strategy that more than quadrupled the firm’s assets under management. Investcorp’s other investments in Italy have included Gucci, Riva and Dainese.

The purchase of elite clubs by sovereign wealth funds or billionaires, some from the Middle East, has caused a surge in spending in European soccer. Sheikh Mansour bin Zayed Al Nahyan, an influential member of the Abu Dhabi ruling family, owns Manchester City and the Qatar Investment Authority controls Paris Saint-Germain. Saudi Arabia’s Public Investment Fund bought Newcastle United for 305 million pounds ($421 million) last year.

One significant absentee from the buying spree is Germany, where rules on professional football-club ownership prevent a commercial investor from holding more than 49% of the voting shares in a team. German soccer credits the so-called 50+1 edict for keeping club wages and ticket prices low compared with other major leagues in Europe.

Source:
courtesy of BLOOMBERG

by Daniele Lepido and Tommaso Ebhardt

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