Never shying away from risk, two hedge funds are entering an arena not for the faint-hearted: acquiring stakes in up-and-coming soccer stars. London-based hedge funds Hero Investments and Sports Asset Capital are giving customers an opportunity to grab a piece of the action by buying shares of promising soccer players, Bloomberg News reports. “It’s fascinating, says Jacob Schmidt of London hedge fund Schmidt Research Partners, “but you could easily burn your fingers”—and a lot more. Sounds like a winner for sports fans, all right, but says Schmidt, “Investing isn’t about fund, it’s about hard work...the risk is that people who are amateurs might get involved.” Hedge funds in sports will likely help smaller teams better compete for talent. “If we can help with the acquisition of players,” Hero founder Nick Hely-Henderson said in a Bloomberg News interview, “we can help create a level playing field.” Together the funds have raised a total of $280 million to spend on sports players. Sports Assets Capital, recognizing the risks involved, has even bought insurance to protect its investors against injuries that could end a player’s career. But that in itself won’t guard them from a losing season. In fact, historically, investments in sports clubs have left enthusiasts with lighter pockets. In one case, U.K.-based Singer & Friedlander Group lost 75% of its investment in soccer shares. Still, the thought of getting in early on a future superstar is alluring, even if not always successful. “It would be jolly nice to find 50 [U.K. soccer players] Wayne Rooneys, but that’s unlikely,” Hely-Henderson told Bloomberg News. “Just as you don’t expect 80 winners in a traditional portfolio, we don’t expect 80 stars.”
