MSD Partners: a new force in English football finance

[SussexDon1inIreland]

https://www.chroniclelive.co.uk/sport/f ... p-19822911

There is a report in this mornings Financial Times (you need to subscribe to see the article) talks about Michael Dell

an American company investing part of the fortune of PC pioneer Michael Dell.

Over the past year, MSD Partners has loaned Premier League side Southampton nearly £ 80million, funded the £ 200million takeover from rival Burnley and loaned out monies to Derby County.
MSD’s first foray into English football preceded the pandemic, but the crisis has helped create an opportunity for the investment firm as the sport faces an unprecedented financial crisis and other lenders retreat. The Premier League, the richest football competition in the world, estimates that each month without fans in the stadiums collectively costs England teams £ 100million.

“The clubs need the money and MSD has the money,” said Kieran Maguire, a football finance scholar at the University of Liverpool and author of The Price of Football. “Commercial banks will not touch football clubs. It is seen as a high risk. “

They also looked at Sunderland and Newcastle.

[Chester Perry]

You can read the Financial times article here - some publications choose to block the free to use webapp like the Times and The Athletic, some like the Financial Times, New York Times and the Telegraph do not

https://outline.com/RLb6Rd

[Marty Dobson]

" These guys are longer term strategic money,” said a banker with knowledge of MSD’s operations. “For the most part they don’t finance purchases, they just provide long-term stable funding . . . they provide something that doesn’t exist.”

That, however, comes at a price. The latest accounts for St Mary’s Football Group, the holding company for Southampton, showed that the £78.8m loan, which is due for repayment in 2025, carries an annual interest rate of 9.14 per cent. That interest rate is in line with what MSD has charged other clubs, according to people familiar with the matter."
That interest rate on Southampton if £7m a year. Does anyone know the terms of our loan...are we being charged the same rate and is it on £200m ?

[Chester Perry]

" These guys are longer term strategic money,” said a banker with knowledge of MSD’s operations. “For the most part they don’t finance purchases, they just provide long-term stable funding . . . they provide something that doesn’t exist.”

That, however, comes at a price. The latest accounts for St Mary’s Football Group, the holding company for Southampton, showed that the £78.8m loan, which is due for repayment in 2025, carries an annual interest rate of 9.14 per cent. That interest rate is in line with what MSD has charged other clubs, according to people familiar with the matter."
That interest rate on Southampton if £7m a year. Does anyone know the terms of our loan...are we being charged the same rate and is it on £200m ?

This has been covered endlessly particularly on the takeover thread - it is assumed that we are paying something between 9% - 12%, that will largely depend on whether fees and first payments have been rolled up into interest. Alan Pace will tell you it is a mortgage, but it is around 30 years since any Burnley fans have paid an interest like that on a mortgage

The amount borrowed has been speculated by various reports with a lower amount at £60m and an upper amount of £80m - most commentators now err to the lower figure.

while MSD have not and do not show an interest in taking over clubs. one of the partners in MSD owns a club in Denmark and concluded the takeover of Spezia in Serie A yesterday with his own money - that is detailed here viewtopic.php?f=2&t=20891&start=6345

[KateR]

MSD UK Holdings put a 52 Million loan out at 9% in Oct 2020 and 65 Million loan out in Feb 2021 at 8%, you can read into that what you wish. From my perspective we will have a ~9% rate on the loan whatever the amount.

it should be noted that MSD Partners are not the group issuing the fotball loans as I understand but a sub division under MSD UK Holdings. I also feel it has been set up as UK Holdings for different deals to what MSD Partners do and that the people managing the two companies are different though interlinked backward.

[Paul Waine]

You can read the Financial times article here - some publications choose to block the free to use webapp like the Times and The Athletic, some like the Financial Times, New York Times and the Telegraph do not

https://outline.com/RLb6Rd

This is a "good" article by Samuel Agini in the FT.

However, there is a weakness. Agini writes: "Over the past year, MSD Partners has lent almost £80m to Premier League team Southampton, provided funding for the £200m takeover of rival Burnley and made a loan to Derby County, a historic English club." And, further into the article he states: "The firm has lent about £170m in total to English clubs, according to a person familiar with the matter."

So, "the £200m takeover of Burnley" is wrong. ALK acquired 84% of the club. 84% of £200m is (roughly) £170m - but other reports suggest ALK will pay around £150m for their 84%. A large part of the purchase price is being funded by the vendors, that is, Mike Garlick and John B will wait for what is reported to be about £50m to be paid over 3 instalments.

So, let's look at it from the other end. Agini says MSD have lent £170m to English football clubs. Soton have borrowed £80m. Derby have borrowed XX??. So, the amount loaned to ALK is somewhere less than £80m - maybe £60m is a good estimate.

Lot's of other interesting information on MSD. For example: "Founded in 2009, MSD manages about $15bn, with investments spanning public equities, real estate, private equity and credit. As well as investing some of Dell’s wealth — and working alongside the tech entrepreneur’s family office — it also manages substantial amounts for other investors."

[KateR]

you might want the full conspiracy theory and look at the 52 Million loan in Oct 2020 at 9% being the loan to BFC

[Paul Waine]

MSD UK Holdings put a 52 Million loan out at 9% in Oct 2020 and 65 Million loan out in Feb 2021 at 8%, you can read into that what you wish. From my perspective we will have a ~9% rate on the loan whatever the amount.

it should be noted that MSD Partners are not the group issuing the fotball loans as I understand but a sub division under MSD UK Holdings. I also feel it has been set up as UK Holdings for different deals to what MSD Partners do and that the people managing the two companies are different though interlinked backward.

Hi Kate, I'm not sure if I'm mis-reading your post. The impression I have is that MSD Partners is the senior entity, headquartered in US, and MSD UK Holdings is a UK entity owned by MSD Partners.

Companies House filings by MSD UK Holdings record that Robert Platek, John Licciardello and Marcello Liguiri are "persons with significant control" with effect from 1 Jan 2021. Platek and Licciardello are both names in the FT article.

[KateR]

Hi Kate, I'm not sure if I'm mis-reading your post.

No you're not but it is to do with nuances, I believe the top people for MSD Partners from what I know are not the same people who are doing the deals for loans via MSD UK Holdings, they are probably the people rubber stamping the loans though. My recollection is that MSD Holdings was something of a breakaway group of people who wanted to pursue the football financing side of things so it became part of the umbrella group of MSD Partners.

Typically MSD Partners are doing much larger deals than MSD UK Holdings. Although I could be confusing MSD Partners with MSD Capital

However, its a while since I did the research, although I don't think it makes any material difference to the loan

[Paul Waine]

you might want the full conspiracy theory and look at the 52 Million loan in Oct 2020 at 9% being the loan to BFC

If we look at "the takeover" thread, MSD UK Holdings issued 2 loan notes - on The International Stock Exchange (Guernsey) in October - on 8-Oct-2020. 52GBP at 9.00% and 15GBP at 7.75%. Both notes are due Sept-2030.

Then on 15-Jan-2021, MSD listed EUR24,023,813 at 7.779% and on 4-Feb-2021 MSD listed GBP65m at 8.00%. Both these notes are due 2031.

We know that Southampton have reported their loan in the accounts that were published a few weeks ago. Timing of Soton's loan aligns reasonably well with the 2 notes listed in October 2021 (though, there isn't a one-to-one relationship).

I'm more inclined to align the loan to ALK, in relation to ALK's purchase of BFC, as aligning with the 2 loan notes listed in Jan and Feb. Again, there is no direct "one-to-one" alignment.

We've not seen any documentation relating to the loan notes. My guess (I could be wrong) is that MSD is securitising their "English football loans." Possibly, selling off the more senior tranches of the obligations, while retaining the "lower rated" tranches for their own account.

My guesses are "advised by" the backgrounds and previous experience of the MSD partners. In addition to Platek and Licciardello, the FT article mentions Gregg Lemkau has been hired "senior Goldman Sachs banker" to lead MSD Partners.

I may be wrong, but I like what I'm reading. I see this as all positive for BFC.

Exciting times.

UTC

[Taffy on the wing]

You can read the Financial times article here - some publications choose to block the free to use webapp like the Times and The Athletic, some like the Financial Times, New York Times and the Telegraph do not

https://outline.com/RLb6Rd

If you can get the NY Times for free i suggest you do so.......i have to pay over here but it's well worth it.

[KateR]

I'm more inclined to align the loan to ALK, in relation to ALK's purchase of BFC, as aligning with the 2 loan notes listed in Jan and Feb. Again, there is no direct "one-to-one" alignment.

My guesses are "advised by" the backgrounds and previous experience of the MSD partners. In addition to Platek and Licciardello, the FT article mentions Gregg Lemkau has been hired "senior Goldman Sachs banker" to lead MSD Partners.

I may be wrong, but I like what I'm reading. I see this as all positive for BFC.

It's all guesses, but I don't see issuing a formal statement 31 Dec 2020 linked to a loan posted in Feb, nor would I see the loan in Euro's being linkied to to the BFC loan, but who knows.

That failed deal for the Sunderland takeover was led by MSD employees Glenn Fuhrmann, Robert Platek and John Phelan – whose company FPP Sunderland ultimately agreed a £9million loan with owner Stewart Donald’s holding company, Madrox Partners, after takeover talks stalled. So the MSD main guys had set up a company (FPP Sunderland) but it was eventually a loan deal to the owner of Sunderlands holding company, which has similar look to the ALK. This is where maybe, just maybe, MSD pulled back from being owners to concentrating on being lenders to other owners/potential owners. Interestingly, MSD UK Holdings were only established as a company on June 29 2020 and share one common director with FPP Sunderland – Robert Platek, I don't know what has happened to FPP.

Funnily enough the signatory for the Southampton loan on behalf of MSD UK Holdings is a Marcello Liguori – the same individual who signed the deal between Madrox and FPP during the failed Sunderland buy out. This is not a name I see much but he is with MSD Capital (a partner), which controls/invests M Dell's fortune, which is a different company to MSD Partners.

[bfcjg]

NINTCHDBPICT000367352055.jpg (1010.11 KiB) Viewed 2050 times

And here's me thinking Dell boy didn't have a pot to p1ss in.
Here he is with the Clarets family silver.

[Paul Waine]

It's all guesses, but I don't see issuing a formal statement 31 Dec 2020 linked to a loan posted in Feb, nor would I see the loan in Euro's being linkied to to the BFC loan, but who knows.

That failed deal for the Sunderland takeover was led by MSD employees Glenn Fuhrmann, Robert Platek and John Phelan – whose company FPP Sunderland ultimately agreed a £9million loan with owner Stewart Donald’s holding company, Madrox Partners, after takeover talks stalled. So the MSD main guys had set up a company (FPP Sunderland) but it was eventually a loan deal to the owner of Sunderlands holding company, which has similar look to the ALK. This is where maybe, just maybe, MSD pulled back from being owners to concentrating on being lenders to other owners/potential owners. Interestingly, MSD UK Holdings were only established as a company on June 29 2020 and share one common director with FPP Sunderland – Robert Platek, I don't know what has happened to FPP.

Funnily enough the signatory for the Southampton loan on behalf of MSD UK Holdings is a Marcello Liguori – the same individual who signed the deal between Madrox and FPP during the failed Sunderland buy out. This is not a name I see much but he is with MSD Capital (a partner), which controls/invests M Dell's fortune, which is a different company to MSD Partners.

Hi Kate,

I've done a little more googling.

MSD Capital: "MSD Capital is a private investment firm established in 1998 to exclusively manage the assets of Michael Dell and his family. MSD Capital engages in a broad range of investment activities and has the flexibility to invest in a wide variety of asset classes. MSD has offices located in New York, Santa Monica and West Palm Beach."

www.msdcapital.com

MSD Partners: "MSD Partners, L.P., an SEC-registered investment adviser, was formed in 2009 by the partners of MSD Capital, L.P. Established in 1998, MSD Capital exclusively manages the assets of Michael S. Dell and his family. MSD Partners utilizes a multi-disciplinary investment strategy focused on maximizing long-term capital appreciation by making investments across the globe in the debt and equity of public and private companies, real estate and other asset classes. Michael Dell and his family are substantial clients of MSD Partners. MSD Partners operates from offices in New York and Santa Monica."

www.msdpartners.com

There's also a footnote on the MSD Capital site: "*If you intended to search for information relating to the Registered Investment Adviser MSD Partners, L.P. or MSD Partners’ MSD Private Capital Group, please use the following links to be redirected to their respective websites: www.msdpartners.com and www.msdprivatecapital.com."

Exciting times.

UTC

[Woodleyclaret]

Money lenders are nothing new to BFC, the major difference, unlike some previous director loans they dont want it back for a few years ,allowing a cohesive plan to develop our team .

[Zlatan]

If by exciting Paul is inferring the thrill of a gambler at the bookies he may well be right. However I personally don’t like gambling, especially when it’s our historic club that is at stake here, so for the last time Paul, please drop the “exciting times” at the end of your usually informative posts - it detracts from what you are writing and is making you look daft.

[JohnMcGreal]

Hi Kate,

I've done a little more googling.

MSD Capital: "MSD Capital is a private investment firm established in 1998 to exclusively manage the assets of Michael Dell and his family. MSD Capital engages in a broad range of investment activities and has the flexibility to invest in a wide variety of asset classes. MSD has offices located in New York, Santa Monica and West Palm Beach."

www.msdcapital.com

MSD Partners: "MSD Partners, L.P., an SEC-registered investment adviser, was formed in 2009 by the partners of MSD Capital, L.P. Established in 1998, MSD Capital exclusively manages the assets of Michael S. Dell and his family. MSD Partners utilizes a multi-disciplinary investment strategy focused on maximizing long-term capital appreciation by making investments across the globe in the debt and equity of public and private companies, real estate and other asset classes. Michael Dell and his family are substantial clients of MSD Partners. MSD Partners operates from offices in New York and Santa Monica."

www.msdpartners.com

There's also a footnote on the MSD Capital site: "*If you intended to search for information relating to the Registered Investment Adviser MSD Partners, L.P. or MSD Partners’ MSD Private Capital Group, please use the following links to be redirected to their respective websites: www.msdpartners.com and www.msdprivatecapital.com."

Exciting times.

UTC

Exciting times for who? Michael Dell and his family?

[Stevie Morgan]

If by exciting Paul is inferring the thrill of a gambler at the bookies he may well be right. However I personally don’t like gambling, especially when it’s our historic club that is at stake here, so for the last time Paul, please drop the “exciting times” at the end of your usually informative posts - it detracts from what you are writing and is making you look daft.

He can sign off his posts how he wants. Block him if you don't like reading it.

[StuffyClaret]

If by exciting Paul is inferring the thrill of a gambler at the bookies he may well be right. However I personally don’t like gambling, especially when it’s our historic club that is at stake here, so for the last time Paul, please drop the “exciting times” at the end of your usually informative posts - it detracts from what you are writing and is making you look daft.

Or else?

[tarkys_ears]

Sounds like loan sharking... Or maybe VM Varga's operation from Fargo season 3????

[Zlatan]

He can sign off his posts how he wants. Block him if you don't like reading it.

Of course you’re right, he can. I was politely asking him not to though and I would like to think there’s nothing wrong with that, or are you the internet police?

[DCWat]

Of course you’re right, he can. I was politely asking him not to though and I would like to think there’s nothing wrong with that, or are you the internet police?

Perhaps an updated user name to Paul “Exciting Times” Waine would do it.

[Paul Waine]

Perhaps an updated user name to Paul “Exciting Times” Waine would do it.

Thanks, DC, that's made me laugh.

I'll stick with my user name, that's all I need.

Exciting times.

UTC

EDIT: I'll add another post, later, for any that are wondering why I find it "exciting times.

[Rileybobs]

Thanks, DC, that's made me laugh.

I'll stick with my user name, that's all I need.

Exciting times.

UTC

EDIT: I'll add another post, later, for any that are wondering why I find it "exciting times.

Paul, when you edit your posts will you please start adding the Exciting Times sign-off to your additional text too. Thanks in advance.