Younger generations managing ultra-wealthy family offices are moving capital from traditional stocks into sports teams and infrastructure. One in five firms now holds sports stakes, treating the sector as a serious alternative investment to traditional private equity.
Younger generations are changing how ultra-wealthy families manage their money. A recent report by Bank of America Private Bank shows that family offices are moving away from only buying public stocks and traditional bonds. Instead, they are putting significant money into sports teams and sports-related businesses. Data shows that one in five family offices now owns a direct stake in a sports team. This interest is much higher among younger leaders, with 40% of firms managed by millennial and Gen Z professionals now targeting the sports sector.
For a long time, buying a sports team was seen as a luxury hobby for the extremely rich. However, this is changing. Investors now see sports as a serious alternative asset class. Nearly 60% of the family offices surveyed are either currently invested or looking into the sector. This is not just about owning a team. About 18% of these firms are spending money on the businesses around sports, such as manufacturing equipment, managing stadium logistics, and handling merchandise distribution. In India, this reflects the growing interest from business families in leagues like the IPL, ISL, and PKL, which are increasingly viewed as professional business ventures rather than just passion projects.
The move is largely driven by a lack of good options in the public stock market. With fewer companies choosing to list their shares through an IPO, investors are searching for new places to put their cash. Typical family offices keep between 26% and 50% of their wealth in alternative assets like real estate or private equity. Now, sports are being added to this mix as a way to grow wealth outside of standard market cycles.
However, investors must consider the risks involved with this asset class. Unlike a public stock that can be sold on an exchange in seconds, a stake in a sports team is very hard to sell. It is an illiquid investment, meaning investors might be stuck with their money for a long time. Additionally, team valuations have reached record highs, which raises concerns about whether these assets are overpriced. Future returns will depend on the stability of media rights, fan engagement, and the growth of new leagues. Investors should track how these valuations hold up over the next few years, as the sector relies heavily on media deals and large-scale consumer popularity.