The Wall Street Journal reports that former UFC owners Lorenzo and Frank Fertitta have started a $500 million private equity fund, Fertitta Capital. The company aims to target consumer-facing companies in tech, media and entertainment.
The Fertittas sold the UFC for near $4 Billion this past July and with its newfound liquidity it decided to start the investment company. The company, which will be based out of Los Angeles, will be run by former UFC Chief Financial Officer Nakisa Bidarian.
The company intends to take minority positions in companies but will not rule out taking controlling stakes and larger deals of up to $500 million. According to the article, the fund is set to deal in direct-investing for the long-term with flexible as Lorenzo Fertitta notes that the basis of the premise was from his experience with would-be buyers approaching them about acquiring the UFC.
Payout Perspective:
The news is not shocking as Fertitta Capital will likely takes its lessons from the UFC and apply that to its investing strategy. With the tech, media and entertainment sector continued growth, it can pick and choose where to invest. As a private equity firm, there is less regulation which gives them some flexibility in how they structure deals.
So they think this is a better investment than the ufc? Did they see that the ufc reached its peak?
I think they sold at a good time. I don’t think that valuation is justified. The UFC makes a lot of money, but at $4B it’s overvalued and the new owners will struggle to meet their financial obligations even while running a successful promotion.