The Financial Times this morning has run another in depth investigative report on the bidders for Everton FC, 777 Partners. What I found particularly concerning is that the Pink ‘Un had approached four of the entities mentioned in the report for comment and none had responded.
Two of these were regulatory authorities, including one on
Bermuda which is a hub of the reinsurance industry.
I am not an expert on high finance, but the FT has a good
record for investigative journalism in relation to this sometimes less than transparent
world. Everton have had enough blows
and the problem is that there does not seem to be another credible bidder in
the wings as work continues on the new Bramley Dock stadium. Relegation is still a possibility.
A Bermudian financial structure used by the Miami-based
bidder for Everton Football Club to funnel money invested for widows and
orphans into the sport has begun to unravel, according to the Pink ‘Un. 777 Re,
a Bermuda-based reinsurer, has enabled 777 Partners to pursue an ambitious dea lmaking
spree that has included trophy sporting assets and football clubs from Genoa
and Hertha Berlin in Europe to Vasco da Gama in Brazil.
ut the reinsurer’s ability to further finance the
Miami-based firm’s deals is under pressure, while creditors to 777 Partners
have turned to the courts. US insurance group A-Cap, a lender to 777, late last
month said it would attempt to raise $400mn in fresh capital and take back
control of assets ceded to 777 Re because of credit rating downgrades.
Separately, a lawsuit filed in New York last week sought to
prevent the transfer of 777 Partners’ assets to a co-founder to protect
creditors’ interests, calling the firm a “house of cards”. 777 declined to
comment on the court case.
777, which initially made its money in niche areas of
finance such as structured settlements, historically flew under the publicity
radar. The deal to acquire Everton from
British-Iranian Farhad Moshiri has put the group into the spotlight, drawing
scrutiny from local politicians, journalists, rating agencies and regulators.
The Premier League has been assessing 777 since September
last year, during which time Sir Jim Ratcliffe’s purchase of a Manchester
United stake was waved through. 777 has not disclosed how it will finance an Ev
A person close to 777 told the Financial Times in December that an entity called Nutmeg
Acquisition would be used in the purchase. Following scrutiny of 777 Re’s
lending to Nutmeg, people close to 777 insisted that separate financing plans
were in place.
777 Partners has lent at least £150mn to Everton, according
to several people with knowledge of the matter. A-Cap has also provided direct
finance to a number of 777 entities. The reinsurer was at the heart of 777’s
“insurance funding model”, according to 2021 pitch documents that said 777 Re
sat between third party insurers and 777 portfolio companies.
People close to 777
said the group and the reinsurer had an “aggressive” investment strategy. In
the presentation, 777 said its approach could generate returns on equity of
more than 40 per cent, compared with the 10 per cent in the “traditional
approach
At the start of last year, half of 777 Re’s $3bn assets were
classified as related party investments, while $2bn worth were classed as
“level 3” assets considered hard to sell or accurately value, according to the
most recent accounts available.
Comments
Post a Comment