Between billionaire hedge funder Steve Cohen bidding on a minority stake in the Mets (his childhood team as a boy in Great Neck) and billionaire private-equity honcho Tom Gores reaching a deal for a minority stake in the Detroit Pistons (guess where he grew up?), it seems like plunking down serious cash to indulge your boyhood fantasies is reemerging as a popular investment opportunity. But Businessweek found two (presumably non-billionaire) finance types who don’t like the idea of someone else getting their status symbol on.
Citing examples of three hedge fund owners whose funds faltered or closed after investing in sports teams, two fund-of-fund investors said they found the trend disturbing. According to Brad R. Balter, head of Balter Capital Management in Boston, which doles out money to hedge funds:
James Pallotta, the hedge-fund owner who invested in the Boston Celtics, insists “it’s just the opposite” of a distraction. True, Palotta closed up his fund after two years of losses, but it happened in 2009 (not the best year for … anyone), and he’s already back with another fund. Pallotta also clarifies that owning a piece of the Celtics involves the arduous task of sitting in two board meetings a year.
But Brett H. Barth, a partner at BBR Partners in New York, which invests in hedge funds, still isn’t convinced:
You sure you don’t begrudge them, Brett? Maybe just a little?