Emirates NBD launches £100mn 'Hero Global Football Fund'

Published: November 10, 2008

Emirates NBD, one of the largest banking groups in the Middle East, has launched a £100mn ‘Hero Global Football Fund’. The fund plans to identify promising young players from Africa, South America and the Far East in order to develop their talent and then make a profit by selling players’ registrations and other economic benefits, such as image rights, to professional clubs in Europe.

The fund has also made a private investment into the Glenn Hoddle Academy in Spain, a specialist academy for young players, set up by the former England player and manager.

“Middle East investors are seeing the value of the sports industry, in general and the football sector in particular, and we’re excited to build on that,” says Rick Pudner, CEO of Emirates NBD.

The fund is set up as an expert unit trust fund in Jersey and will have a life of five years. It is planning to raise £100mn, across three currency classes, with a minimum individual investment of US$100,000. The fund targets a minimum internal rate of return (IRR) of 10%. An investment manager has been appointed who will draw on the football expertise of an advisory board comprised of David Davies, OBE, the former executive director of the FA; David Elleray, the former referee; and Alan Hansen, the former Liverpool captain.

Although returns are likely to fluctuate, Jamal Bin Ghalaita, general manager for consumer and wealth management at ENBD, stresses that the success of the fund is not linked to finding a “star” player. “The business model is realistic, assuming that two thirds of players will not become professionals. Of those that do make it, many will join second-tier clubs. The financial success of the fund does not depend on finding the next David Beckham: rather, on producing a steady flow of competent, professional footballers,” he says.

The global football sector, worth more than US$20bn, has become a popular investment target with Middle Eastern investors in recent months. In September, the Abu Dhabi United Group bought Manchester City Football Club for an estimated £210mn, in a deal put together by the London-based investment firm PCP Capital Partners.

Last year, Dubai International Capital tried to buy 50% of Liverpool Football Club for a reported sum of around US$400mn, but the deal fell through. Manchester United signed a sponsorship deal reportedly worth over £10m with Saudi Telecom in August.