Oaktree Capital, a private equity giant, took a calculated risk by acquiring distressed Inter Milan football club.
See how the California based PE group aims to revitalize the leading team and ultimately sell it for a substantial profit, showcasing the power of strategic investment in the world of professional sports.
When the Suning suffered financial distress in 2020-2021, they loaned USD $336 million from Oaktree Capital.
This lifeline came with a catch: Inter Milan itself as collateral. When the Suning were unable to repay USD $428 million in May 2024,
Oaktree, a private equity giant with USD $192 billion in assets under management, took control of the Italian champions, setting in motion a strategic investment with a clear endgame: revitalize Inter Milan and ultimately sell it for a substantial profit.
This audacious move aligns perfectly with the classic private equity model, showcasing Oaktree’s ambition and financial acumen. Inter is the seventh Serie A owned by US investors.
The acquisition of Inter Milan is a typical example of a private equity strategy.
This approach involves identifying distressed assets with strong underlying potential. Like that of Inter Milan, with a storied history, large passionate fanbase, and a strong brand.
The club’s potential for global growth, despite its financial challenges, was a key factor in Oaktree’s decision.
The Suning family’s financial woes allowed Oaktree to acquire Inter Milan at a fraction of its true market value, a “buy low” strategy fundamental to the private equity model, as it provides a solid foundation for future value creation. It’s a calculated risk, but one with the potential for a 5X return.
Oaktree Capital – Private Equity At Its Best: Turning Inter Milan Finances Upside Down
Oaktree model is to acquire companies with huge potential and get involved in their management, actively improving their performance.
In the case of Inter Milan, this will result in the implementation of a comprehensive financial restructuring, operation global expansion, infrastructure investment, and the relentless pursuit of on-field success.
By streamlining operations, expanding into new markets, upgrading facilities, and building a winning team, Oaktree aims to significantly increase Inter Milan’s overall value.
Private equity firms typically keep their investments for a limited period of 3-5 years.
They carefully execute their turnaround strategies with the ultimate goal of selling the company at a substantial profit.
In Inter Milan’s case, Oaktree is likely eyeing a sale to a deep-pocketed investor.
Investors like the oil rich Gulf Cooperation Council, where football clubs are viewed as both trophy assets and lucrative business ventures.
Let’s also not forget that both Saudi Arabia and the United Arabs Emirates are becoming serious football investors.
The Saudi Public Investment Fund had allegedly negotiated through Goldman Sachs a potential acquisition of Inter Milan.
Oaktree – What Is Their Ultimate Goal With Inter?
In conclusion, Oaktree’s ambitious goal is to generate high ROIs from Inter Milan.
Considering the multi-billion dollar valuation of leading football clubs such as Manchester City, Manchester United, Barcelona and Madrid, this could translate to a sale price exceeding a billion dollar, which is the current estimated market value of Inter Milan.
Oaktree Capital’s takeover of Inter Milan is a great case study of financial acumen, strategic foresight, and calculated risk-taking.
This in a time of geopolitical tension and global economic shocks.
Therefore, it’s a story of transformation, ambition, and the pursuit of profit in the dynamic world of professional sports.
While the final chapter remains unwritten, Oaktree’s bold gamble could redefine the landscape of football finance and leave an enduring mark on the sport’s history
By: Andrea Zanon
Andrea Zanon is the Founder of Confidente and Empower Capital. With 25 years of entrepreneurship, operations, sustainability and technology experience,
He is an international advisor who has worked for financial institutions and entrepreneurs on sustainability, international affairs and development
