Arctos closed on the first fundraising round this week, according to an email sent to clients today by Evercore, a marketer of investment funds to institutional investors. The new fund, Arctos Sports Partners Fund II, includes additional investments from about half the firm’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. An Arctos spokesperson declined to comment.
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Two weeks ago, Arctos disclosed in an annual filing that its first fund ended 2021 with $3.94 billion in assets. The Dallas-based private equity firm co-founded and led by Ian Charles has been a prolific raiser of institutional assets to invest in sports. The business launched in the fall of 2019 and raised more than $400 million in its first six months and then doubled that by its first anniversary.
The first Arctos fund has made 25 investments in 18 franchises, according to the email sent to clients. Sportico has reported the firm owns stakes in half-a-dozen MLB teams including Fenway Sports Group, the parent of the Red Sox, English soccer’s Liverpool FC and NHL’s Pittsburgh Penguins, two NBA franchises including the Golden State Warriors, hockey’s Wild and Lightning, Real Salt Lake of MLS and Elevate Sports Partners. According to the Evercore email “every franchise investment is outperforming base expectations, as the sports industry has rebounded from the COVID-19 pandemic significantly faster than anticipated.”
Arctos’ primary strategy is to buy minority stakes in professional sports teams, businesses that have historically appreciated faster than stocks but traditionally have had only individual partners. Most leagues have opened up their ownership ranks to private equity funds like Arctos as a way to support team value growth and provide limited partners a market to sell their stakes.
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