The new owner of Atlético de Madrid is one of the great monsters of international finance. Apollo Global Management, which will hold a majority of around 57% of the Madrid team, is a large investment manager: it is dedicated to capturing the savings of its clients, almost always other funds, pension plans or large assets, to offer them returns higher than those of the stock market.
Based in New York, and founded in 1990 by three partners: Leon Black, Josh Harris and Marc Rowan, it is a leading name in the world of international markets and manages around a billion dollars. It is one of the big players in this type of investment, alternatives to traditional products, ranging from venture capital to debt, together with other American companies, such as Blackstone and KKR, and the Canadian Brookfield.
How do these funds work?
The operation does not represent a simple injection of capital, but the entry of a company that is among the leading venture capital companies in the world, a sector that in recent years has become a protagonist of the financial industry. They are entities whose investment horizon is limited: they operate by purchasing companies, both those not listed on the stock exchange (such as Atlético de Madrid) and those listed (such as Applus, the large ITV company) to subsequently sell them. They have large amounts of money, because in addition to having their clients’ funds, they can go into debt (usually at the expense of the company they buy).
The usual goal is to hold investments for a limited period (usually five or seven years) to sell them to another investor, or place the company on the stock market, at a higher price, returning the money to its customers plus above-market interest. Companies like Apollo have also broadened their interests and also act as financiers in other cases or operate, in the longer term, in the infrastructure or energy sector.
The sector has grown explosively over the last decade, thanks to low interest rates and strong demand from end investors. Therefore, these managers (mostly American, but with some relevant players from the UK, Canada, Sweden or France) have tentacles in major economic sectors such as infrastructure, healthcare, real estate, energy or food.
Who owns Apollo?
The company is a multinational listed on the New York Stock Exchange and is worth approximately 77 billion dollars (approximately 66 billion euros). As is the case with many large listed companies, the main owners are investment fund managers: Capital Group (8.5%), Vanguard (8.2%) and BlackRock (5.8%). However, its three founders also maintain stakes ranging from 5.9% to 6.6%. Atlético de Madrid’s new shareholder has offices in key cities in North America, Europe, including Madrid, and Asia. In reality, even if the money to buy Atlético de 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 sport
The manager has already invested more than 17 billion dollars in various operations related to football clubs, media rights and stadium financing. Last September it launched Apollo Sports Capital (ASC), the Apollo platform dedicated exclusively to investments in the sports field with an investment capacity of approximately 5 billion dollars (approximately 4.3 billion euros). With ASC, look to invest in credit and hybrid (credit and ownership) opportunities across franchises, leagues, venues, media and sporting events. ASC is led by its CEO, Al Tylis; co-managers, Rob Givone and Lee Solomon; and director of strategy, Sam Porter.
Atlético de Madrid will be the main investment with a majority stake in ASC and is not part of a timeshare strategy to control the club. Other recent investments by Apollo Sports Capital include the Mutua Madrid Open and Miami Open tennis tournaments.
As well as being reportedly interested in buying Manchester United, Apollo finances other Premier League teams and recently signed an £80m loan deal at Nottingham Forest.
Presence in Spain
In Spain, Apollo is behind Neinor’s acquisition of Aedas, with the aim of creating Spain’s largest promoter. Together with Neinor, he wants to take over the 79% that Castlelake holds in the listed Aedas Homes. In the tourism sector, it landed in the hotel world in Spain in 2019 with the intention of acquiring a significant portfolio which finally materialized with the acquisition of six facilities and which now, having completed the maturation process of the operation, it is trying to sell. He also owns 49% of the transport giant Primafrío, which he entered after a frustrated IPO of the company founded by the Conesa family. In the financial sector it bought Evo Banco in 2013 from Novagalicia and sold it six years later to Bankinter.
One of his best-known operations in Spain was the purchase of 85% of Altamira, the company that managed Santander’s assets and problem loans, for almost 700 million euros. Although he later sold his stake to Italy’s doBank, controlled by another venture capital firm, Fortress (a common practice), it marked a milestone in the management of debt and asset portfolios in the country. It was also in the takeover war for services specialist ITV Applus, but it ultimately stepped aside thanks to bids from two other sector funds, TDR and I Squared.
What does Apollo invest in in the rest of the world?
Apollo has assets in almost every industry and is among other go-to brands. In 2021, Apollo acquired an approximately 90% stake in Verizon Media, which included the iconic Yahoo! and AOL. In the field of distribution, Apollo has just withdrawn a 2 billion takeover offer for the Papa John’s pizza chain. Less known, one of its main assets is Athene, an insurer specializing in pension and annuity services. Its importance lies in the fact that it provides Apollo with a massive and stable flow of long-term capital through insurance premium money that the manager uses to finance its 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.
