KKR has agreed to acquire Arctos Partners, valuing the sports-focused private markets firm at approximately $1bn, according to a report by Bloomberg citing unnamed people familiar with the transaction
The deal, which is subject to approval from major US professional sports leagues, will see Arctos’ existing management team remain in place, with Co-Founder Ian Charles continuing to lead the business. As part of the transaction, senior Arctos executives are expected to receive equity incentives linked to KKR, which could lift the overall value of the deal to as much as $1.5bn, depending on performance.
Under the terms of the agreement, Arctos executives will retain their existing carried interest on current investments while also being granted shares in KKR, aligning long-term incentives between the two firms, the people said.
The acquisition provides KKR with exposure to two fast-growing segments of the private markets — sports investing and secondaries. Arctos manages approximately $15bn in assets and has built a diversified portfolio of minority stakes across major US sports franchises. Its investments include holdings in NBA teams such as the Golden State Warriors and Utah Jazz, MLB franchises including the Los Angeles Dodgers and Houston Astros, as well as the NFL’s Los Angeles Chargers and the NHL’s New Jersey Devils.
KKR is understood to be using its own balance sheet to fund the acquisition, with Arctos set to sit within the firm’s broader asset management platform. KKR oversaw $723bn in assets as of the end of September.
Approval from sports leagues is expected to be contingent on a number of conditions, including the review of potential conflicts of interest involving athletes and KKR portfolio companies.
