The new owner of Atletico Madrid is one of the greatest monsters of international finance. Apollo Global Management, which will control a majority of about 57% of the Madrid team, is a great investment manager: it is committed to taking savings from its clients, often other funds, pension plans or large fortunes, to offer them returns higher than those achieved by the stock market.
Headquartered in New York and founded in 1990 by three partners: Leon Black, Josh Harris and Mark Rowan, it is a leading name in the world of international markets and manages approximately $1 billion. It is one of the big players in this type of investment, alternatives to traditional products, ranging from venture capital to debt, along with other American companies, such as Blackstone and KKR, and Canadian Brookfield.
How do these funds work?
The process is not just an injection of capital, but the entry of a company that is among the largest venture capital firms in the world, a sector that in recent years has become major players in the financial industry. They are entities with a limited investment horizon: they operate by buying companies, both those that are not listed on the stock market (such as Atletico Madrid) and those that are listed (such as Appplus, the large ITV company) to sell later. They have large sums of money, because in addition to getting their clients’ money, they can get into debt (usually to the detriment of the company they are buying).
The usual goal is to hold the investments for a limited period (usually five or seven years) to sell them to another investor, or to float the company on the stock market at a higher price, returning the money to its clients plus above-market interest. Companies such as Apollo have also expanded their interests and also act as lenders in other cases or operate long-term in the infrastructure or energy sector.
The sector has grown tremendously in the past decade, thanks to low interest rates and strong demand from end-investors. These managers (mostly American, but with some related players from the UK, Canada, Sweden or France) thus have tentacles in key economic areas such as infrastructure, health, real estate, energy or food.
Who owns Apollo?
The company is a multinational company listed on the New York Stock Exchange and is worth about $77 billion (about 66 billion euros). As is the case with many large listed companies, its main owners are investment fund managers: Capital Group (8.5%), Vanguard (8.2%), and BlackRock (5.8%). However, its three founders also retain stakes ranging from 5.9% to 6.6%. The new shareholder of Atletico Madrid has offices in major cities in North America and Europe, including Madrid and Asia. In fact, although the money needed to buy Atletico Madrid comes from the end investors, those who will manage the team will be the fund managers, with the aim of maximizing their investment.
Role in sports
The manager has already invested more than $17 billion in various operations related to football clubs, media rights and stadium financing. Apollo Sports Capital (ASC) was launched last September as the Apollo platform dedicated exclusively to investments in the sports field with an investment capacity of approximately $5 billion (about €4.3 billion). With ASC, the company seeks to invest in credit and hybrid opportunities (credit and real estate) in franchises, leagues, venues, media and sporting events. ASC is led by its CEO Al Tillis. Co-Directors, Rob Givony and Lee Solomon; and Director of Strategy, Sam Porter.
Atletico Madrid will be the main investment holding a majority stake in ASC and is not part of the time-share strategy to control the club. Apollo Sports Capital’s other recent investments include the Mutua Madrid Open and Miami Open tennis tournaments.
In addition to his interest, according to the press, in buying Manchester United, Apollo is financing other teams in the English Premier League, and recently signed an £80 million loan to Nottingham Forest.
Presence in Spain
In Spain, Apollo is behind Neinor’s takeover of Aedas, aiming to create the largest Spanish promoter. Together with Neinor, the company wants to acquire Castlelake’s 79% stake in listed Aedas Homes. In the tourism sector, it arrived in the world of hotels in Spain in 2019 with the aim of acquiring a relevant portfolio, which was finally achieved through the acquisition of six establishments, and now, having completed the process of maturation of the operation, it is trying to sell them. It also owns 49% of transport giant Primavrio, which it entered after the disappointing IPO of the company founded by the Conesa family. In the financial sector, Evo bought Banco in 2013 from Novagalicia and sold it six years later to Bankinter.
One of its most famous operations in Spain is the purchase of 85% of Altamira, the company that managed Santander’s assets and non-performing loans, for approximately 700 million euros. Although it later sold its stake to Italian bank doBank, which is controlled by another venture capital firm, Fortress (a common practice), it marked a milestone in debt and asset portfolio management in the country. It was also in a takeover battle for specialist ITV services company Applus, although it eventually stepped aside, due to the bidding of two other funds in the sector, TDR and I Squared.
What is Apollo investing in in the rest of the world?
Apollo has assets in almost all sectors and is among other benchmark brands. In 2021, Apollo acquired a roughly 90% stake in Verizon Media, which included Yahoo! And America Online. In distribution, Apollo just withdrew its $2 billion takeover bid for pizza chain Papa John’s. Less well known, one of its main assets is Athena, an insurance company specializing in retirement and pension services. Its importance is that it provides Apollo with a massive and stable flow of long-term capital through insurance premium funds that the manager uses to finance his investments in credit and private equity. More than 5,200 Apollo and Athene employees, including more than 860 investment professionals, work in Apollo offices around the world.
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