Hedge Fund & Soccer No Winning Combo

Hedge funds keep cropping up as owners of soccer teams, but, exciting as it may seem, it may not be a winning investment formula. So says Matthew Lynn of Bloomberg News, who notes in a recent column that while hedgies may identify with sports teams vis á vis their aggressiveness and risk-taking, such investments in most cases will not pay off. Sports, Lynn notes, is one of those industries – such as airlines and fashion – that simply don’t make money, but that won’t stop hedgies from seeking glory on the field. German Absolute Capital Management Holdings’ 11% stake in soccer team Borussia Dortmund has failed to score for its owners; in fact, the team has been on the verge of bankruptcy. The crux of the problem, suggests Lynn, is that “more money has poured into the industry than anyone knows how to spend. Investing in sports threatens to hasten the decline in returns already in evidence.” Hedgies on this side of the pond have had a somewhat better time of it, with JohnHenry’s Boston Red Sox baseball team enjoying a period of unparalleled success for the franchise, both on the field and financially.