Miguel Ángel Moreno
Madrid, Apr 9 (efe-epa).- German club Borussia Dortmund, where Norwegian Erling Haaland plays, Ajax Amsterdam and France’s Olympique Lyon all share an investor: a Spanish investment fund tied to the insurance company Mapfre.
Clubs with healthy balance sheets, that generate profits and have diversified revenue streams — and that know how to how to navigate the transfer market — are the elements that have led the insurer to focus on Borussia, Ajax and Olympique as one of the first financial products available to the general public in Spain that can be used to invest in soccer.
The ‘Mapfre Behavioral Fund’ is, as the name suggests, based on behavioral economics, a trend that tries to understand the non-rational elements involved in investors’ decision-making when looking for market opportunities. And one example, according to fund manager Luis García, is soccer.
“If there is one investment where you can see the weight of psychology, it is soccer. Investors shy away from it because of the psychological component or volatility, but for us it shows an inefficiency: the value of the clubs is much greater than the price reflected by the markets,” he said in an interview with EFE.
When it comes to investing, García looks for companies with a “good business, with good margins, low debt and people who manage it impeccably and have the capacity to create value”.
Soccer club shares make up around 10% of the fund’s composition, with 5.5% of its portfolio in Borussia, 2.5% in Ajax and 2% in Olympique.
Their first pick was Olympique Lyon, an “exceptionally well-run” team with several attractive points: a new stadium built in 2016 with the capacity to host events all year round — until the pandemic hit — and an eye on the future, as it boasts its own audiovisual production company. “And it’s a club that supplies the big ones in Europe. It buys cheap and sells expensive. It’s a way of generating value,” García explains.
Similar criteria justify the fund’s investment in Ajax Amsterdam: it is an established team that has been generating profits and distributing dividends to its shareholders for years, while at the same time has the capacity to generate talent that it sells to other clubs, with recent high profile cases such as Frenkie de Jong and Sergiño Dest (both sold to Barcelona), Matthijs de Ligt (Juventus), Hakin Ziyech (Chelsea) and Donny van de Beek (Manchester United) in just the last two seasons.
The most recent investment was in Borussia Dortmund, made at the height of the pandemic. “We had been talking to their CFO for a year, but we made the decision in March because their stock had fallen to half the price,” recalls Garcia.