Four former executives of RedBird Capital Partners have in partnership with the firm unveiled a new private equity shop investing in professional sports.
Alec Scheiner, Brent Stehlik, Niraj Shah and Isaac Halyard founded Otro Capital in June, according to their LinkedIn profiles. The new GP will invest in sports, media, gaming and entertainment, targeting under-monetized and under-valued assets.
In creating Otro, the founding partners are not severing ties with RedBird, a high-profile dealmaker in the world of sports led by Goldman Sachs veteran Gerry Cardinale. On the contrary, Otro plans to invest alongside RedBird in deals of mutual interest.
In fact, the pair have already collaborated on their first transaction. At roughly the same time it launched, Otro joined with RedBird and Maximum Effort Investments, a consortium led by Hollywood actor Ryan Reynolds, to buy a minority stake in Alpine Racing, a Formula 1 sportscar team backed by Renault.
Otro, RedBird and Maximum Effort invested €200 million ($212 million) for a 24 percent interest in UK-based Alpine, valuing it at $900 million. Scheiner joined the board of directors.
This month, Otro announced that several sports stars – among them Kansas City Chiefs quarterback Patrick Mahomes and tight end Travis Kelce, and championship-winning golfer Rory McIlroy – will also invest.
Otro is expected to soon roll out an inaugural flagship fund, sources told Buyouts. The target is not known.
The firm presently manages Otro Forest Co-Invest I, a capital-raising vehicle for the Alpine deal, sources said. It holds more than $107 million of assets, according to an ADV filing.
Scheiner was a partner at RedBird, playing a role in its sports and media business. He helped oversee a number of deals, such as Fenway Sports Group, a holding company anchored by the Boston Red Sox and Liverpool Football Club. Before, he was president of the Cleveland Browns and an executive with the Dallas Cowboys.
Stehlik was a RedBird operating partner, serving as president of portfolio investment OneTeam Partners, a sports licensing company. Earlier, he worked in North American major and minor leagues, including as executive vice president and CRO of the Cleveland Browns.
Shah was a principal at RedBird, participating in sports, media and entertainment investing. Before, he was an associate of Apax Partners. Halyard was a vice president active in the sports and media business. Earlier, he worked in Goldman Sachs’ investment banking division.
Private equity investing in professional sports is surging, ushering in an entirely new global strategy, Buyouts reported last year. Drawn by the industry’s premium values, multiple funds are today doing deals at a vigorous pace, buying stakes in teams, leagues, assets (for example, media rights) and multi-asset holding companies.
Not long ago, private equity’s connection with sports was almost non-existent. This changed as wealthy owners began to lift prohibitions on institutional investment.
Over 2019-2021, for example, Major League Baseball, Major League Soccer, the National Basketball Association and the National Hockey League all adjusted their rules to allow select funds to make minority investments in teams.
Otro and RedBird declined to provide a comment on this story.
(This story was updated to clarify the relationship between Otro Capital and RedBird Capital Partners.)
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