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City fund giant Lindsell Train faces pain over European Super League as club values fall
One of the City’s most powerful and successful investors, Nick Train, was today bracing for financial damage to his funds from the European Super League fiasco.
Train’s investment fund Lindsell Train is the biggest independent investor in both Manchester United and Juventus, which were both major cheerleaders for the breakaway tournament which now lies in tatters.
Lindsell has a 27% stake in United’s New York-listed shares with other big City investors including Jupiter Fund Management, Janus Henderson and Invesco.
At Juventus — the other major plc club involved — Train’s fund holds 10%.
Both shares surged on Monday after weekend news of the Super League contract before collapsing as the venture failed.
Manchester United shares fell 6% and Juventus stock fell 11% today, with both now trading at Friday’s levels.
Analysts said the debacle “seriously damages” the reputation of the clubs’ owners and some said it would weigh on their valuations until they were sold to new backers.
Outside shareholders have few rights to demand strategic change at Manchester United because the shares owned by the Glazers, who bought it in 2005, bear 10 times the voting power of the publicly listed stock.
“With Manchester United in particular, it’s hard to see the company becoming more valuable until the Glazers are out,” warned David Bick, one-time adviser to the club.
Analysts have been stunned at how badly the clubs’ owners miscalculated how fans, domestic leagues and even governments would respond to the plan.
One fund manager said Train, whose company did not respond to requests for comment, would “not be happy”, particularly with the reputational impact to his funds.
Lindsell Train’s website highlights how it prefers to invest in companies which “tend to exhibit characteristics associated with good corporate governance and responsible business practices”, including those “that play an important positive social or environmental role”.
It adds: “We believe that such positive benefits for society should be consistent with our aim to generate competitive long-term returns.”
Given the uproar among fans, some will question Manchester United’s commitment to the society it serves.
Dan Jones, football finance expert at Deloitte, said the fiasco was less likely to damage clubs’ value: “What this past 48 hours has shown is how football moves, engages and mobilises people like nothing else.
“All the sound and fury reminds us football is something that people are passionate about. We all live atomised lives with very few things lots of people care about, but here is something we do.
“That can only mean that, as a business proposition, it holds up.”
He said this week may have put to bed the idea of a new super league for good as it had been exposed as “a terrible idea”.
“It has come around every three years for the last 25 years as a cycle when UEFA are working out what to do with the Champions League. They always raise this as a stalking horse - the spectre at the feast.
“This is the first time they have gone really public an dreally big an dhave had their bluff called and their hand shown. It was not a very impressive hand.”
City investors have also been left baffled as to how JPMorgan, with its strong London presence, did not foresee the likely reaction while it was assembling the €3.25 billion infrastructure grant behind the plan.
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