Though Europe's proposed Super League is hitting headlines in a negative way, one money manager with holdings in soccer teams thinks it may benefit his portfolio.
Last month, 12 European soccer teams unveiled plans to launch the new, exclusive league. However, plans started falling apart when the six U.K. clubs involved pulled out of the league.
One firm in particular is keeping a close eye on the outcome of the ongoing Super League debacle. Despite negative press, Luis Garcia Alvarez, manager on the MAPFRE Asset Management Behavioral Fund, thinks it will boost interest in soccer clubs as an investment.
The high-conviction strategy uses behavioral economics — integrating concepts from psychology into economics to understand why people make the decisions they do. It holds between 30 and 35 companies.
He holds stakes in European clubs Olympique Lyonnais, Amsterdamsche Football Club Ajax and Borussia Dortmund, accounting for a total 10% of the £50.5 million ($70 million) strategy. Soccer is one of the most compelling growth stories in the market, he said in an email.
"All these three are well-managed clubs, with solid balance sheets. European football is going through a transformation, but most investors (mainly Europeans) are not paying attention to it, because of behavioral biases and the short-term noise around the industry. This is the reason why one can find significantly undervalued assets, in our view," he said.
The Super League issue hasn't affected his holdings — in fact, he thinks rather than harming the case for investing in soccer, the situation has led to more interest in the sector with many portfolio managers now interested in what's going on.
"The impact on the market prices of the clubs we hold has been almost negligible, and they continue to trade well below their intrinsic value, in our view," he said. The best way to play the European soccer long-term investment game is through well-managed clubs with almost no debt, he said.
