Batter up! Sports investor RedBird returns to the market with Fund IV

RedBird Capital Partners, a high-profile dealmaker in the world of sports, is back in the market with a fourth flagship offering.

The New York private equity firm last week filed Form D documents for RedBird Capital Partners Fund IV and several sidecars. Goldman Sachs is the placement agent.

The target was not disclosed. Fund IV is, however, expected to seek roughly the same amount raised by its predecessor, partner Robert Klein told Buyouts in an interview last year. RedBird Series 2019, wrapped up in March 2021, collected $2.6 billion.

Founded in 2014 by Gerry Cardinale, a veteran of Goldman Sachs’ PE business, RedBird is a hands-on growth equity investor specializing in core verticals in sports, telecommunications, media and technology, financial services and consumer sectors. It structures deals flexibly, typically writing checks of $100 million to $200 million or greater.

The firm’s “sweet spot” is sports, Klein previously told Buyouts. RedBird sources and executes on opportunities in the “closed ecosystem” of sports, he said, utilizing extensive networks of sports entrepreneurs, families and professionals, many of them developed over time by Cardinale.

“We are not a vanity investor in sports,” Klein said. “We have a long history of seeing things in sports that others don’t.”

Last year, RedBird closed its largest sports deal to date. It invested alongside NBA star LeBron James and businessmen Maverick Carter and Paul Wachter in Fenway Sports Group, a holding company anchored by the Boston Red Sox and Liverpool Football Club. The transaction valued FSG at $7.35 billion.

FSG has since been on the acquisition trail, buying among other things a controlling interest in the NHL’s Pittsburgh Penguins. Sold in late 2021 by former Penguins captain Mario Lemieux and businessman Ron Burkle, the hockey franchise’s purchase price was reportedly about $900 million.

Following the Penguins acquisition, Forbes ranked FSG number three in its 2022 list of the world’s most valuable sports empires, putting its worth at $9.8 billion.

RedBird has continued to aggressively pursue sports investments. It is said to be in talks with Elliot Management, owner of Italian soccer club AC Milan, about a potential transaction, emerging as a rival to Investcorp. On-going negotiations between Investcorp and Elliott are based on a valuation of about $1.26 billion, Reuters reported.

Among its non-sports deals, the firm earlier this year joined Ardent Leisure Group in an agreement to sell Main Event Entertainment, a family entertainment company backed in 2020. The buyer, Dave & Buster’s Entertainment, agreed to pay $835 million.

Cardinale leads a RedBird partnership team of eight. Along with Klein, they include Hunter Carpenter, Andy Gordon, Andrew Lauck, Alec Scheiner, Dan Swift and Mike Zabik. Nicole Musicco, who came onboard as a partner in 2020, was this year hired by California Public Employees’ Retirement System as its CIO.

Another sports-focused private equity firm, Arctos Sports Partners, is in the market with a sophomore offering, sister title Private Equity International reported. Arctos, also an investor in FSG, recently held an initial close that secured nearly half of the fund’s $2.5 billion target.

RedBird declined to provide a comment on this story.