Investments  

Arsenal takeover could see fund managers hit back of the net

Arsenal takeover could see fund managers hit back of the net

The imminent delisting of Arsenal Football Club by its majority shareholder has left several fund managers pondering the gains they could make on their football club investments.

American businessman Stan Kroenke, who owns 67 per cent of the football club, has struck a deal to buy Russian metals magnate Alisher Usmanov’s 30 per cent stake in Arsenal for £550m.

The £1.8bn valuation placed on Arsenal by its sale means, according FTAdviser's sister title the Financial Times, the club has been valued at a multiple of 16 times its earnings before interest tax depreciation and amortisation.

Article continues after advert

One of the most ardent advocates of the investment case for football clubs is Nick Train, who has built up investments in Italian champions Juventus and English club Manchester United.

Were the same multiple to be applied to the shares of Manchester United, it would be worth about 25 per cent more than its current market cap, and were it to be applied to Juventus, the club would be worth about double its current valuation.

Mr Train is invested in both Manchester United and Juventus shares across his £1.3bn Finsbury Growth and Income Trust, and his Lindsell Train Global Equity fund.

He said the key reason for investing in football clubs is the changing nature of the global media market, with football clubs now content providers, and he expected broadcasters to pay ever higher amounts to broadcast football matches, making the clubs a long-term growth investment.

Lindsell Train is the largest institutional shareholder in Juventus, owning 10 per cent of the club, and the second largest owner of Manchester United, owning 20 per cent.

Meanwhile Steve Davies, who runs the £1.2bn Jupiter UK Growth fund, is a long time shareholder in Manchester United.

He bought the shares because the quantity and value of the commercial deals the club has makes it a global luxury brand, while the vagaries of the team’s performance on the pitch may mean the shares become cheaper to buy.

Juventus, which is listed on the Milan stock exchange, currently has a market cap of €860m (£774m) while Manchester United, which is listed on the New York Stock Exchange, has a market cap of $3.4bn (£3bn).

david.thorpe@ft.com