Blog 5: Week 2

As I have mentioned in earlier blogs, MAI is currently in the middle of a private equity fund centered around investment into sports. Now that the fundraising portion of the fund has closed, they have begun capital deployment and are busy meeting with private equity managers of various funds thematically related to MAI's fund. Today, two such meetings occurred, however, a large part of the team was away at a board meeting and unable to attend. To ensure that these absent members received all the information they needed from these meetings, I was tasked with writing detailed summaries of each one. 

The first meeting was with a group called Otro Capital. Otro is a private equity company that takes majority control of stable, EBITDA-earning franchises with what they feel is room for growth. For example, about 6 years ago, Otro, foreseeing a rise in interest in Formula 1 racing, bought roughly 60% of one of the 10 formula 1 teams, Alpine. At the time, Alpine was worth around $800 million, but after Otro took control, appointing new management, refining the business model, and the F1 market surge, they sold their stake in the racing team for $6.4 billion for a very high return.

The second meeting was with Avenue Capital Solutions, who, while thematically related, invests in a entirely different manner than Otro. Avenue prefers to provide owners with capital to utilize as they see fit, as opposed to taking control, in very risky emerging markets such as women's sports and African and Asian leagues.

Both firms met MAI's fund theme criteria of investment into sports, but did so in very different ways. I was then asked to provide a recommendation of which firm I thought was the better investment, and I chose Otro because of their team's connection to the world of sports and ability to capitalize on that through taking control of franchises. Each of the members of Otro's team has worked in the business department of a professional sports team, giving them a huge advantage when taking over.

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