GdS: Why Investcorp want to buy Milan – ‘A new phase of expansion’

By Oliver Fisher -

More information continues to filter regarding Investcorp’s potential takeover of AC Milan, and we are beginning to learn more about their intentions.

La Gazzetta dello Sport label Investcorp as a global investment fund who focus on six lines of business: private equity, real estate, guaranteed yield investments, infrastructure, credit management and strategic capital. It was with the investments in the luxury brands Gucci and Tiffany that announced the Arab fund in the West, and they are not done there.

The running theme is investments abroads and in 2016 they acquired the debt management of 3i – a major private equity player in the UK – for £222m. Under the leadership of Executive President Mohammed Alardhi, the fund’s assets under management have jumped from $10bn to the current $42bn dollars (€39bn) and the business has branched out into 13 offices around the world.

In Italy there are Gucci, Riva and Dainese in Investcorp’s sphere, as well as Corneliani, CloudCare, Vivaticket and Hwg. Their real estate properties include the Rome headquarters of the International Fund for the Development of Agriculture (bought for €128m) and Kering’s Milan office (€74m).

The report adds that Investcorp are going through ‘a new phase of expansion’ from the United States to Asia, with the aim of increasing the capital under management up to $100bn dollars. Owning a football club can be strategic and owning a club like Milan is very tempting.

Given that the total exposure from Elliott on Milan amounts to €740m (including the loan not repaid by Li Yonghong), the US fund believes that an adequate return would be €1bn which gives them a capital gain of at least €100m.

Investcorp have been attracted by the excellent performance of the team on the pitch in proportion to the low costs of the squad and if they take over they will inherit a young team, with a sustainable wage budget. Then, the Rossoneri brand has maintained its charm even in the more difficult years, especially in territories such as the Middle East.

In short, Milan are once again an attractive brand who are appealling thanks to the word done by Elliott in cleaning up the accounts and because this has coincided with a return to competing for trophies on the field, and now a fund with an aggressive expansion plan have come along to potentially take over the reins.

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