
China's CMC trims stake in City Football Group

China-based CMC Capital has exited the bulk of its remaining stake in City Football Group (CFG), a series of football clubs built around the Manchester City brand, with CMC founder Ruigang Li vacating his seat on the company’s board.
The Financial Times reported that CMC had reduced its holding from 7.24% to 1% by selling equal portions of shares to Silver Lake and Newton Investment & Development, an entity controlled by Sheikh Mansour bin Zayed Al Nahyan, deputy prime minister of the United Arab Emirates. Silver Lake is now the second-largest shareholder in CFG after Sheikh Mansour.
CMC is said to have owned 13% of CFG at one point and has made a previous partial exit to Silver Lake. It teamed up with fellow Chinese private equity firm Trustar Capital to acquire a 13% interest in CFG for USD 400m in 2015. Trustar exited in 2019. Silver Lake initially paid USD 500m for 10% of CFG in 2019, leaving the Chinese investors with 12%.
According to CFG’s website, Silver Lake now holds an 18.16% interest in the company. A separate filing confirmed Li’s departure from the board. CFG said that CMC “remains a valued CFG partner, particularly in China,” the Financial Times reported.
Sheikh Mansour acquired English Premier League (EPL) club Manchester City in 2008. He subsequently made it the foundation asset in a platform that also owns New York City, Melbourne City, Mumbai City, and clubs in Japan, Uruguay, Italy, China, France, and Belgium. Revenue reached GBP 624.5m (USD 752m) in 2021, while the net loss was GBP 52.9m.
PE firms targeting European football have tended to favour multi-club platforms over individual clubs, except for distress and highly structured deals. Another strategy is to focus on leagues and media rights owners, which offer exposure to football’s primary revenue stream without the loose spending controls, lack of profitability, and the threat of relegation that comes with club ownership.
Chinese capital flooded into European football in the middle of the last decade, but the tide turned when Beijing imposed tighter controls on outbound investment. Most investors have since sold up or are actively seeking buyers.
Clubs reportedly for sale include Italy’s Inter Milan and England’s Wolverhampton Wanderers, although this is disputed by owners and their advisors. In each case, the owner, Suning Holdings Group and Fosun Group, respectively, faces financial pressures at home and is liquidating assets.
Private equity firms only participated in these investments in a minority capacity, as exemplified by CMC and Trustar’s involvement in CFG. IDG Capital sold its stake in France’s Olympique Lyonnais, while Hong Kong-based LionRock Capital retains an interest in Inter Milan.
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