United Investment Bank (UIB) has launched Royal Football Fund across the Middle East and other emerging markets, said a press statement on Sunday.
The fund, which has been established by the new Dubai-headquartered investment bank, aims to raise $200 million, opening up a business activity which is traditionally closed to the Investment Community.
With a minimum subscription of $500,000 and a lockup period of two years, the fund expects to an average annual net return of 20 per cent.
Arranged into three investment classes, the Royal Football Fund has been created to provide investors with an alternative investment product that can contribute to the diversification of their portfolio in uncorrelated assets. The fund will pull together football clubs and an investment team that have demonstrated an excellent performance record, including FC Porto and a pool of prestigious experts in the football business.
Taking advantage of some of the major revenue generating activities in the industry, the Royal Football Fund will focus on three areas of activity; co-investing with football clubs and leading players agents in the economic (sport and image) rights of football players; equity investments in listed football clubs and the promotion of football matches and related marketing, broadcast and media rights.
“This is a fund where high revenues are generated by the passion of fans,” said UIB CEO Raul Silva.
“It is the passion of the world’s football fans that drive football clubs to continuously invest in improving their teams. They have to stay competitive, satisfying the expectations of both their supporters and shareholders. This is one of the main reasons why the Football industry presents several profitable revenue streams.
“While we are working towards an expected annual average net return of 20 per cent, the same investment management team has achieved much more in the past (average annual net returns of 42 per cent over a 5 years period) with similar investment strategies,” added Silva.
“Returns for player’s economic rights can prove exceedingly strong. To name a few examples; Deco generated a 21.29 per cent IRR, Pepe 146.62 per cent, Falcão 164.54 per cent, Lisandro Lopes 37.21 per cent, Lucho Gonzales 16.68 per cent and Raul Meireles achieved 29.24 per cent. The average IRR of this pool of players was approximately 69.26 per cent.”