Changing Business Could Drive Premier League To Capital Markets - Oliver Fochler In Global Capital

Stone Mountain Capital, an independent alternative investment adviser, works with general partners of direct lenders to raise capital for their funds. Among corporate mid-market and specialty finance strategies, they also lend to football clubs, and while the market is small, Stone Mountain managing partner and CEO Oliver Fochler says that there is significant opportunity in lending to elite teams. “The market is very thin, spread really between the top six clubs in the UK and in each of the major European leagues, and you have a couple of firms which source these deals,” Fochler told GlobalCapital. “There are around three firms in the UK that work on originating this type of bridge football finance deal."  “There are two applications for this sort of financing. One is for a player transfer and the other one is the TV rights. You have future receivables through TV rights and you can finance using those," said Fochler. “It's a unique lending strategy where the underlying assets are very exotic, player transfers and TV broadcasting rights, so that is interesting to investors.” But for direct lenders, the loans, which can yield 6%-8% annually and up to double digit returns in some cases, are very attractive. Fochler notes that the loan is effectively asset backed and investment grade because of the nature of the clubs which are borrowing. He said that this allows lenders to “achieve unlevered returns which are better than high yield” similar to direct lending like returns, adding “it is all investment grade equivalent and uncorrelated to other assets and debt markets.” Interview with Oliver Fochler was covered on 29th June 2017 in Global Capital under 'Changing business could drive Premier League to capital markets' (website requires registration).