JPMorgan Chase’s Billionaire Clients Investing in Sports Teams
JPMorgan Chase’s super-rich clients are increasingly turning to investments in sports teams as the values of these teams continue to rise, attracting attention from institutional firms and solidifying their status as a mature asset class.
Rising Interest in Sports Teams
According to a report from JPMorgan, 20% of the 111 billionaire families served by the Wall Street giant now own controlling stakes in sports teams, a significant increase from the 6% reported three years ago. Additionally, about a third of these families, with a combined net worth of over $500 billion, have invested more broadly in sports teams or stadiums, making it their top specialty asset class ahead of art and cars.
Andrew L. Cohen, executive chairman of JPMorgan’s global private bank, noted that sports investments have evolved beyond just a passion project for these wealthy families. It has become a significant part of their investment portfolio.
Increasing Investment by Billionaire Families
Some of the world’s wealthiest families are following the lead of multibillion-dollar asset managers like Apollo Global Management and Ares Management in delving deeper into sports investments. The increasing values of sports teams, driven in part by robust television ratings and revenue streams, have made them an attractive investment option.
NBA and NFL team owners have also been more open to private equity firms in recent years, contributing to the surge in valuations. For example, the recent $10 billion purchase of the Los Angeles Lakers and the $10.3 billion valuation of the New York Giants highlight the lucrative nature of sports team investments.
Global Opportunities in Sports Investments
While the U.S. remains a dominant market for sports investments, opportunities are growing globally. Wealthy individuals from various countries are buying sports teams, such as Czech football club FC Viktoria Plzen and Manchester United Plc’s football operations, expanding their sports portfolios.
For instance, ammunition tycoon Michal Strnad acquired a majority stake in FC Viktoria Plzen, while U.K. industrialist Jim Ratcliffe took control of Manchester United Plc’s football operations. Their combined net worth of almost $30 billion underscores the significant financial power behind these investments.
Private Markets Activity and Investment Preferences
Billionaire families are also increasing their activity in private markets, opting for active roles in private investments such as taking board seats. The preference for private investments has grown, with nearly 70% of principals preferring active roles, up from 43% three years ago. Despite this shift, most families continue to operate their original family businesses.
According to Andrew L. Cohen, these families are doubling down on private investments, showcasing their commitment to this investment strategy.
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