Play Fantasy Soccer? You Are Running A Fantasy Hedge Fund.

How many points did your team produce this week? Did you pick the right captain? Is it time to transfer that expensive, misfiring striker? If you play Fantasy Soccer you have probably asked yourself similar questions, but what you may not know is that managing a Fantasy team and managing an investment portfolio have more in common than you might think. At least they should be if you plan to win.

Fantasy Soccer?

A Fantasy Soccer player (a ‘manager’) assembles a squad of players with the goal of earning points from their performances in league games. Managers are given a set transfer budget at the beginning of the season with which to build a 15-player squad. The price of players fluctuates based on demand and player trading is an option throughout the season.

Each week managers must choose an 11-player team from their 15-player squad as their active point-earning players. Players outside the 11-player team do not earn points for the manager. Players are awarded or deducted points based on individual actions in their respective matches. As an example, suppose that in this week’s Chelsea match Frank Lampard scores Continue reading “Play Fantasy Soccer? You Are Running A Fantasy Hedge Fund.”

Play Fantasy Soccer? You Are Running A Fantasy Hedge Fund.

Glazers Rushing to IPO Manchester United?

Manchester United is close to completing an IPO of shares in the club.  The Glazer family hopes to raise $1bn by selling anywhere between 25-40% of the club to investors in Singapore and the rest of Asia.  A successful sale at those percentages would value the Red Devils somewhere between 2.5 and 4 billion dollars.

The main details of the deal have been excellently covered in several places (Guardian and Bloomberg to start) so I won’t reinvent the wheel.  I would like to note that the Glazers are attempting to sell shares into equity markets at their most volatile in a year and with many hanging near their 52-week lows.  Asian markets (particularly Singapore)  have been hit harder by the rout compared to European and American markets; the Kospi, Nikkei and Singapore Index have all dropped double digits since the beginning of August.  The owners are betting that rabid Asian Manchester United fans can overcome a market environment where few want to take any risk.

1-year chart of S&P500, FTSE, NIKKEI, KOSPI, EWS
1-year chart of the VIX

Pushing ahead with the sale suggests there is a slight urgency to the financing, whether that urgency is driven by financial pressures on the club or on the Glazers is yet to be seen.

Glazers Rushing to IPO Manchester United?