Balentine Making Opportunistic Allocations to Sports

This article was originally featured on With Intelligence.

Balentine is evaluating sports teams and leagues as part of an opportunistic allocation.

The $9bn AuA multi-family office has spent time in early-stage sports venture strategies but has not yet allocated there, according to head of private markets Ben Webb.

Balentine has already made allocations in the NFL (Cleveland Browns, Buffalo Bills, Los Angeles Chargers), Ligue 1 (Paris Saint-Germain) and college NIL, as well as in emerging leagues like the National Women’s Soccer League.

The MFO is interested in younger leagues but primarily focuses on blue-chip prospects. It has made fund investments as well as direct deals and co-investments.

Sports are attractive because they remain appointment viewing even in a fragmented attention economy, Webb said.

Most of Balentine’s geographic exposure is to the US, though some of the firm’s larger managers have global investments, mostly in Asia and Europe.

Balentine, which reported $5.5bn in AuM on its latest ADV, covers private equity, including growth, buyout and venture capital; real assets; private credit; and an opportunistic sleeve that can include distressed strategies. Sports is the current opportunistic focus.

The firm makes most of its alternatives allocations through pooled vehicles for which it does not charge management or performance fees. They range in size from $5m to $43m,with the average around $25m.

Balentine will sometimes allocate to a manager directly in a particular client’s portfolio on an opportunistic basis.

Balentine’s primary themes, which it plays across asset classes, are decarbonization and electrification, the medical revolution, machine learning and artificial intelligence, and the growth of the Sunbelt region.

Webb prefers funds in the $1-$3bn range but noted that it can be difficult to find smaller funds with a long track record because managers tend to hold larger raises as time goes on, which can impact the underlying strategy. There are also sectors and strategies that might call for a larger fund.

Balentine has a strong bias towards traditional drawdown structures with a specific, defined timeline.

Even for direct deals, the firm looks to partner with an expert, be that a manager, fundless sponsor, or entrepreneur with expertise.

“Whenever we go direct or co-invest, we have to believe it can outperform that same exposure in a diversified fund,” said Mark Bell, head of private capital and family office.

For example, in aerospace and defense, the investment team believes the sector may offer attractive return potential above 15%, based on its analysis of the underlying investment opportunities and associated risks.

Balentine tends to avoid investing directly in fund I or fund II, preferring to get that exposure through a manager-of-managers.

Webb and Bell like managers with long track records and sector specialists with strong deal flow and a repeatable sourcing engine and value creation plan.

“We really are looking for very specialized, niche private capital managers, and co-investments and direct opportunities, that families that are investing their kids’ and grandkids’ money want to take advantage of,” Bell said.

In conducting searches, the private capital team starts with a mandate, then builds a funnel of managers, including those in their network, their clients’ networks and other managers who are currently fundraising.

Desk research narrows the field to about 20 managers, at which point the team starts introductory phone calls that whittle the list to about five for Bell or Webb to review.

Due diligence focuses on the manager’s team, track record and repeatability of the strategy.

Once the private capital team is in agreement, the manager is presented to the investment committee.

Balentine’s clients are mostly first-generation wealth creators and their families, with some large institutional clients as well.

The firm targets a 20% allocation for clients who are interested in the illiquidity premium from alternatives; 60-75% of clients have some allocation to alts.

_{Balentine LLC ("Balentine") is an investment adviser registered with the U.S. Securities and Exchange Commission. This information has been prepared by Balentine LLC ("Balentine") and is intended for informational purposes only. This information should not be construed as investment, legal, and/or tax advice.}

_{This is not an offer to sell, or a solicitation of an offer to purchase and fund managed by the Adviser. Such an offer will be made only by an Offering Memorandum, a copy of which is available to qualifying potential investors upon request.}