Alternative asset manager Blue Owl embarks on sports investing with NBA Phoenix Suns
Another private investment firm has made its way into the growing stable of minority investors from the National Basketball Association teams.
On Tuesday, Dyal HomeCourt Partners, a division of $ 52.5 billion alternative asset manager Blue Owl, announced it had made a minority investment in the Phoenix Suns.
The deal is the first of its kind for Blue Owl, which was formed in December 2020 after Dyal Capital Partners and Owl Rock Capital Group agreed to merge and go public through a special purpose acquisition company sponsored by an affiliate. of HPS Investment Partners. Dyal already held a minority stake in Owl Rock and HPS.
“We are delighted to partner with Robert Sarver and the Suns organization as HomeCourt’s inaugural investment,” Michael Rees, co-president of Blue Owl, said in a statement. “The Suns have made incredible strides on and off the pitch over the past few years and we believe that under Robert’s leadership the best is yet to come.” Robert Sarver is the majority owner of the Suns.
When the PSPC deal was announced in December, Blue Owl said he had formed an exclusive partnership with the NBA, under which he would be the only pre-approved buyer of minority stakes in the association’s 30 teams. “We believe that having these approvals and waivers already in place will give selling owners greater certainty in our ability to complete any investment and make us the buyer of choice when a minority stake in an NBA franchise becomes available. “Blue Owl said in his S-1 filing in June.
A growing asset class
Since then, a number of investors have invested in NBA teams, including Arctos Sports Partners, which Sportico says acquired a minority stake in the Golden State Warriors in May.
Sixth Street and billionaire Michael Dell, meanwhile, joined the San Antonio Spurs investor group as strategic partners in June, according to an announcement at the time. Sixth Street has its own links to Blue Owl, as Dyal made a minority investment in Sixth Street prior to the merger – an agreement to which the latter is opposed.
The agreements reflect a growing institutional interest in sports investments, resulting from a confluence of factors that Institutional investor previously reported. First, the valuations of sports teams have increased, making it difficult for individual investors to buy an entire team. And while sports leagues were once reluctant to allow private equity firms, they have since changed their tone.
“The infusion of institutional capital into the NBA will be of huge benefit to the league and its owners and the Suns are proud to be Dyal HomeCourt’s first investment,” Sarver said in the announcement.
Rules and regulations
But investing in an NBA team is not without its challenges. The NBA “places significant restrictions” on what investors can and cannot do, according to the S-1. The association has approval rights on Dyal HomeCourt transactions and the admission of new investors. The NBA may also change its rules without notice to the fund.
What’s more, sports leagues require investors to take passive stakes and use a hands-off approach to ownership, II Previously reported.
Blue Owl has ties to the NBA beyond that first investment. Blue Pool Capital, a multi-family office that is said to manage Jack Ma’s fortunes of Alibaba and that of its co-founder Joe Tsai, is a significant investor in the company, according to a 13-G file. Blue Pool general manager Oliver Weisberg briefly served as interim general manager for the Brooklyn Nets and is now the alternate NBA governor for the team, the NBA website says. Tsai is the sole owner of the Brooklyn Nets.
The company is part of a network of wealthy families who have invested in Blue Owl. Among them are CH Investment Partners, a multi-family office in partnership with the family of the late Texas real estate mogul Trammell Crow’s, and Iconiq Capital, another multi-family office which is said to have managed the fortune of Sheryl Sandberg and Mark Zuckerberg, other 13-G deposits show.
A spokesperson for Blue Owl declined to comment further on the news.