What’s a bigger marketing engine for a private equity firm than a famous face to attract limited partners? A growing number of celebrities, including athletes and politicians, are taking on private investing as a second act after their playing and political careers end.
Are these big names getting deep into the investment operations of a firm, or are they just lending their superstar statuses for the publicity? The consensus is mixed.
Eli Manning, the quarterback who led the New York Giants to two Super Bowls in 2008 and 2012, admits he still has a lot to learn about the PE world, and probably won’t be spending his time analyzing balance sheets anytime soon.
“I’m just trying to be a sponge right now,” Manning told Mergers & Acquisitions via a Zoom interview recently. “I’m just trying to learn as much as possible. I’ll probably never be the guy that’s crunching the numbers on all these deals. You have to leave that to the experts.”
Manning joined New York-based Brand Velocity Group as a partner in 2021. BVG is a PE firm that was founded in 2019, and so far, has been focusing on the consumer sector.
Super Bowl Winners
Manning says he has always been interested in business, numbers and finances and wants to be more than just a name associated with a PE firm. “I want to be impactful and helpful,” he says.
He says he is looking to leverage his marketing background, like his various partnerships with companies and sponsors while he was a player, to better understand and build businesses. “I think that part of my NFL career will be more beneficial to BVG than anything else,” he says.
Manning says he was attracted to BVG because of its profit share program where all employees, not just top-level executives, get a share of the firm’s profits. He made the comparison to a championship winning team where everybody, not just the players and owners, gets a ring. “It’s everybody with one common goal working together. It’s all above the ‘me’ mentality. One of the things I learned in football that made the greatest impact is when you make everybody feel the success of something,” he says.
Manning had a relationship with BVG before he joined the partnership last year. Along with his father Archie, and older brothers Peyton and Cooper, Eli invested alongside BVG when the firm acquired BBQGuys in 2020. BBQGuys is an e-commerce seller of barbeque grills, grilling accessories and other outdoor kitchen products.
But Manning is hoping he can eventually help BVG expand into other sectors. “As we grow as a company, I’ll try to use my resources and connections to see in what other areas [I can contribute],” he says. “I think the sports world is very interesting right now. You are seeing more private equity firms getting involved. I think there’s room to grow and venture into other fields.”
Steve Young, who quarterbacked the San Francisco 49ers to three Super Bowls, co-founded middle-market private equity firm HGGC. He said does not expect the floodgates to open with former NFL players joining the industry.
“It’s a hard business,” he said on a call recently. “It’s not like ‘Oh, yeah I’ll just go into private equity.’ It’s a hard, hard, business. There is something about private equity that I think because of the challenge and reward, draws those highly competitive and highly skilled people.”
Young got his start in private capital after he retired from the NFL. He first joined a fund of funds, Northgate Capital. After this, he hooked up with eventual HGGC co-founder Rich Lawson and Bain executive Bob Gay to co-found PE firm Sorenson Capital in 2002. Five years later, Young and Lawson teamed up to launch HGGC.
“Private equity was an interest because it felt in some ways as difficult as football,” Young said. “You can’t replicate what the NFL does and what it asks of you. But some things feel familiar, and the challenge of private equity was familiar. There is a competitive landscape and an intellectual challenge that is similar.”
Young, who has a law degree, seems to have found his second calling after leaving football for PE. “I love my private equity career,” he said.
Gary Fencik, a safety for the 1986 Super Bowl winning Chicago Bears, had a much different experience coming into private equity some 30 years ago.
Fencik, a partner at Chicago-based private markets investment firm Adams Street Partners, says it was a lot easier when he played during the ‘70s and ‘80s for players to have other jobs during the offseason. For one, most players weren’t getting paid as well back then as they do now and needed second jobs.
“I think it’s a real challenge [today], at least for football [players], because it is a year-round sport,” he says of players getting involved in business. “I think the commitment you need to make really is very different from what it was 30 to 40 years ago. When I was playing, I was fortunate that you could have some offseason jobs and I tried a few. I was very fortunate that coming out of Yale that I knew football was a fluke. I mean nobody goes to an Ivy League school thinking ‘Yeah, I got an aspiration to play in the National Football League.’”
Fencik had a mentor who recommended that he go to business school while he was still playing football. His college roommate, Steve Woodsum, co-founded Summit Partners in Boston and introduced him to the partners at what is today Adams Street. He focuses on investor relations for the firm, and got his MBA at Northwestern University’s Kellogg School of Management.
From Public to Private Equity Service
The PE industry is more competitive than ever, and firms are always looking for ways to make themselves stand out. One way to do so is to hire a politician. There are many advantages to having a notable public face on your roster, particularly for networking, which only helps in today’s cutthroat fundraising and dealmaking climate. Especially if a politician has a prior PE background.
Take Jeb Bush, the former Florida Governor and brother of former President George W. Bush. Jeb is the co-founder, chairman and managing partner of Coral Gables, Fla.-based Finback Investment Partners, which was founded in 2019. Before Finback, Bush founded two other PE firms in Dock Square Capital and Britton Hill Holdings.
Finback, which focuses making minority investments, raised $350 million in its debut fund in September 2021. The fund expects to make between 10 and 12 investments, averaging between $20 million and $40 million in equity size, across the business services, information technology, education, healthcare, industrials, digital infrastructure and financial services sectors.
Bush is not the only politician that is playing in the PE arena. Former Vice President Dan Quayle is chairman of Cerberus Global Investments and a member of the firm’s senior leadership team. Timothy Geithner, the former secretary of the U.S. Department of the Treasury, is president of Warburg Pincus, and former house speaker Newt Gingrich works at AM Capital Partners as a strategic partner.
No doubt there will be more high profile athletes, politicians and celebrities joining the private equity ranks in the years ahead.