CEO Interviews

The interview: Athlon Family Office’s De Anna Guerreiro on why sports assets are the next big investment play

Sports assets present perhaps the ultimate combination of passion and finance, offering widespread investor appeal, a dash of vanity and glamour, as well as diverse strategic opportunities across adjacent verticals such as real estate, health and even FMCG. De Anna Guerreiro, Founder of Athlon Family Office, talks us through the unique positioning and current moment of opportunity in sports assets.

Boulevard: First of all, how did you get into private wealth, and particularly, into sports investments?

De Anna Guerreiro: Whenever I get asked that, I think, ‘Because God has a sense of humour.’ I had an NBA player for the Chicago Bulls who reached out to me to mentor him. And while I was mentoring him, I realised that I’d worked with a lot of athletes over the years, and they all needed help with financial literacy. And I started thinking, this is a real problem—there’s a big hole in these athletes’ lives. No-one’s sitting down and teaching them about a budget. And I realised that not all people learn about money, and so that’s how Athlon got started.

Blvd: As well as working with athletes, you also have a lot of experience investing into high-profile sports assets—how do you deal with the highs and lows of these acquisitions, when there’s a lot of passion, and competition, and there can only be one winner?

Guerreiro: When I first got into acquisitions, I had a bank boss who said to me, ‘You can’t love a deal so much that you can’t walk away.’ Even if there are issues, and those telltale signs start unfolding right before you close, most people, they get so entrenched in it – they know that they’ve spent money into the due diligence, and they’re like, ‘I’m not going to walk away,’ and later on it turns into a bloodbath.I’ve had deals that I had to walk away from. And I had blood, sweat, and tears, and money in them, but something went wrong and you’ve just got to walk away. And it’s heartbreaking, especially when you’re passionate and you love it, but there’s some people attached to it that are toxic and their motives are not good. Or you can have several firms all trying to negotiate behind the scenes, while everybody’s putting bids in for a company. And it can get fast and hostile.

“I’ve had deals I had to walk away from. And I had blood, sweat, and tears, and money in them. But something went wrong ang you’ve just got to walk away.”

Blvd: What’s the opportunity for a private investor or family office, and how do they get into this space?

Guerreiro: Knowing the right person. It’s a small space—when you look at it, there’s really a small group of us in sports compared to how many wealth advisors and institutions are out there.

When you look at family offices today, they are going to get real vigilant on direct investments, and they look to bring some kind of value to the company. They are really engaging in sports, which is exciting.

But we’re not just talking about sports franchises—we’re talking about sports tech, or medical devices that athletes are using, drinks that enhance performance, life sciences—there are so many areas that athletes actually touch, and it creates all these different investment opportunities beyond just the sports team. And that’s what we like to focus on.

Blvd: What does the market look like compared to other asset classes, in terms of risk, return and exits?

Guerreiro: With commodities, you have different cycles at different times. In real estate, they all have a cycle period, right? Sports never does; it is always increasing, evolving in some dimension, and when you think about it, sports is recession-proof. People are going to go to the games before they do anything else. They’re always going to put their kids in sports.

“We’re not just talking about sports franchises — there are so many areas that athletes actually touch, and it creates all these different investment opportunities.”

Blvd: Do you see a lot of interest coming from Asia-Pacific and the Middle East? And conversely, do you have clients in the States looking offshore for diversification, or growth?

Guerreiro: Family offices, when they’re looking across the pond, I think they feel more comfortable if they’re putting investments in sports in the UK, Ireland—because they’re English-speaking countries, and the economics are very similar to the United States. So it’s something that the offices can understand very well.

I think you’re going to see more Asian investors buying teams in the US. In the Middle East, they want to put money back into their own backyard. There’s a romantic dance there that can be done with the right partners in the Middle East. There are some really amazing relationships that you can foster over there, and opportunities for pro sports teams like the NFL to create more teams over there.

Blvd: What’s the wider opportunity for sports assets?

Guerreiro: Sports creates lots of jobs. And if, for example, you have a real estate play, there are big potential returns. Texoma FC – our USL soccer team – has a massive real estate development, with a seven-thousand-seat stadium, an entertainment district with a hotel, and a sports facility that’s going to support the local junior high and high school.

“Sports assets is always increasing, evolving in some dimension, and when you think about it, sports is recession-proof.”

The investors in the soccer club itself are automatically included into the equity ownership of the company that owns the real estate. They’re not just getting a soccer team. They’re getting a big real estate play that would otherwise be very difficult for you to get your hands on.

And they can put their brand all over it.

Blvd: Who are your clients, and what are they looking for when they come to you? And what are you looking for in a client—what gets you excited?

Guerreiro: We get so many different profiles, because we have pro athletes who are either currently playing for a team or they’re retired, so there are different needs. And we have partnerships with several big private equity and wealth advisory groups. Then you have investors who are looking for strategic investments, and they just want to be a cheque-writer, and get dividends every year. But also they want to be able to say to their friends, ‘Yeah, I have a stake in the Bulls.’

My favourite kind of investor will say, ‘Listen, I’ve got this company, I’ve been doing construction all my life, so if I put money into Texama, can I get the job for the contracting to build the retail space, or the hotel.’ I’m like, ‘All day long!’ I love those guys.

Or maybe we’ll go to Top Seedz—it’s one of my favourite crackers, and I know the owner, so I’ll say to her, ‘Not only can you put your crackers into our stadium – because I want them into the VIP suites, because I’m a fan, right – plus they’re paleo and they’re gluten-free, and you know, people are health-conscious. So if she invests, she’s a sponsor, she can have her banner all over the stadium, and then she’s making money off of our fans. And I see those kinds of investors as strategic partnerships.

“This asset class reminds me of thee industrial age and the people who invested in the 1800s. Some of those families are still living on legacy money.”

Blvd: Where is the sports asset class right now – compared to, say, the days of the early NFL franchises – and where is it heading?

Guerreiro: I would say that this asset class reminds me of the Industrial Age and the people who invested with those early inventors in the 1800s. Some of those families are still living on legacy money.

We’re in such an amazing time for sports assets. If you’re an investor, and a fan – you’re passionate about sports, you have your own business, you have some capital, you want to invest – do it now. Even if you don’t do it with us, do it now. Because today, you can get in for a million dollars. But five years from now, it might be a minimum of one-hundred million, because there’s no access like there is today. It could be another twenty, thirty, forty years before something else opens up with this avenue of access.

So if you think about the NFL when they were first doing their franchises, that’s kind of what’s going on right now. Those guys wrote cheques for twenty, thirty, fifty thousand – which was a lot of money back then – but now they’re selling their shares for half a billion dollars.

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