Silver Lake, the US-based private equity firm, has once again increased its stake in City Football Group (CFG), the owners of English soccer heavyweights Manchester City and multiple other clubs worldwide, with its investment now standing at over 18%.
Having previously held a 14.5% stake, Silver Lake has bought the extra shares from venture capital firm China Media Capital, which held an 8.24% stake in CFG. The vast majority of that (7.24%) has been sold, with half going to Silver Lake, and the other half having been snapped up by the investment vehicle of CFG’s majority shareholders, the Abu Dhabi royal family.
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The ultimate owner, Sheikh Mansour bin Zayed Al Nahyan, bought Manchester City in 2008 before setting up CFG in May 2013. He controls that company through the Abu Dhabi-based Newton Investment and Development firm.
When Silver Lake bought its original stake in 2019, paying $500 million for just over 10%, that deal valued CFG as a whole at $4.8 billion. Since then, the group has been steadily increasing its share of CFG – adding another 4.5% in September this year, with that deal also involving a CMC share sale.
This latest deal now means CMC will give up its seat on the board of CFG, with the Chinese group’s chairman Li Ruigang having stepped down.
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At the apogee of its investment level in CFG, CMC’s stake came to around 13%.
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By GlobalDataCFG has an eleven-club international portfolio, stretching from full control over some clubs, to majority stakes in others, and then minority holdings in more.
Five of those outfits are in Europe – Manchester City, Troyes of France, Belgian lower-league side Lommel, Spanish outfit Girona, and Italy’s Palermo.
The other teams are New York City from the US, Melbourne City in Australia, Mumbai City in India, Uruguay’s Montevideo City Torque, Japan’s Yokohama F. Marinos, and Sichuan Jiuniu from China.
Palermo is the team most recently added to that portfolio, through a takeover deal struck in July.
Earlier this year, Manchester City was identified by international professional services firm Deloitte as the soccer club to have generated the most revenue in the last 12 months.
Silver Lake, meanwhile, also holds stakes in sports properties including New Zealand Rugby (through a deal struck in February), international entertainment and sports giant Endeavor, and sports merchandise firm Fanatics.
Last year, it took a stake in artificial intelligence company G42, which also has links to the Abu Dhabi royal family in a deal reportedly worth $800 million.
Egon Durban, a managing partner and director at the private equity firm, became a member of the CFG board in 2019.
Three years ago, CFG said it would use the initial Silver Lake investment to “fund international business growth opportunities and develop further CFG technology and infrastructure assets.”
Now, the parent company has said Silver Lake's latest share acquisition represents "further endorsement" of its business model and "continued international growth."
CFG added that CMC "remains a valued partner, particularly in China."
Image: Visionhaus/Getty Images
