Why the fund is putting 4.25 billion euros on the table for 12.5 percent of the shares of PSG, which was only worth 70 million euros in 2011

© AFP

Arctos Partners has acquired Paris Saint-Germain, where Qatar Sports Investments (QSI) remains the main shareholder. Why does the American investment fund put 4.25 billion euros on the table for barely 12.5 percent of the shares of a club that was worth barely 70 million euros in 2011? Three weeks ago, Arctos also bought into F1 team Aston Martin.

Arctos is a private investment fund that buys into companies with growth potential to help them grow so that the shares are then worth even more. It brings money, know-how and a huge network.

According to French newspaper Le Parisien, Arctos’ investment and know-how at PSG will be used to renovate the stadium and training complex, allowing the club to make even more profits in the future. Arctos also believes that PSG can still grow in foreign markets, such as the US, where the investment fund has a lot of expertise in top sports.

According to the French news agency AFP, Arctos would acquire 12.5 percent of PSG’s shares for an amount of 4.25 billion euros. Punishment, because when Qatar Sports Investments took over the club in 2011, PSG was barely worth 70 million euros.

In those 12 years, PSG has of course grown from a local French brand to a European and global brand, thanks to top players such as Beckham, Ibrahimovich, Neymar, Messi and Mbappé. It had not won a title for many years in 2011, while it has become national champions eight times since the takeover and is a regular in the Champions League.

Ibrahimovich and Beckham in 2013 at PSG. They gave the French club star quality. — © AFP

“As an owner without control, Arctos will have no influence on sports matters on the site,” it said. “Qatar Sports Investments will continue to make all decisions at PSG.” But private equity companies such as Arctos usually work very closely with the daily management.

PSG hopes to take a new step in its growth with the partnership. The Parisian club wants to use the support of Arctos to realize some infrastructure works, such as the renovations to the Parc des Princes. Football clubs see modern stadiums as cash cows. In the future, the training center in Poissy will also be taken care of. And Arctos must help PSG grow in foreign markets, such as North America, where it has enormous expertise.

Arctos Partners is headquartered in Dallas and has already invested in baseball (MLB), basketball (NBA), football (MLS) and ice hockey (NHL) in the US. It also bought into Formula 1 team Aston Martin three weeks ago.

Nasser Al-Khelaïfi, the Qatari chairman of PSG, with Prince Charles. — © AFP

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