Leeds United Football Club Partial Acquisition
Project Summary
The English Championship Football League has
been a lucrative investment opportunity for business
tycoons, oil barons and royal family members the
world over, including the US, Russia, Kuwait, India
and Brazil. IIB is aiming to capitalise on the favorable
returns being seen by the league’s success stories
such as Vincent Tan (Cardiff City) and Nottingham
Forrest (Al Hasawi Family), and has acquired a 10%
stake in Leeds United Football Club (LUFC).
LUFC is a club which has held high positions and
three winning spots in the Championship League
– and as of April 2013 sits 11th in the table. LUFC
has recovered from the financial difficulties which
plagued its owner Ken Bates and his consortium of
investors, until a restructuring saw it be successful
in a plan to pay off its debt at a discounted rate. The
club is based at Elland Road in Beeston Leeds, UK,
and has seen a committed local following since its
establishment in 1919.
Investment Strategy
The investment opportunity was introduced to IIB
by Gulf Finance House (GFH) after its purchase
of the club in December 2012. GFH exclusively
own 90% of LUFC through its Dubai-based
investment arm GFH-Capital, and are currently in
talks with other regional players to participate in the
investment. IIB has made a capital injection of
£ 2.5 million against this acquisition.
IIB believes that GFH’s plan to restructure the
financial operations of the club and take on
other strategic investors will make the club more
sustainable and an attractive investment opportunity
for IIB’s shareholders in the future. Indeed since
GFH’s ownership, fans have already seen a reduction
in match ticket prices, the introduction of half season
tickets and a reduction in cost of season tickets for
2013-14. IIB anticipates capital appreciation over the
medium-term, therefore we are currently taking the
approach to hold the 10% investment in its portfolio,
with a consideration to offer it once the club’s
financial position is solidified.
