Man United is a unique club in many ways, not least because it is the only listed club in England.
When United first listed on the New York Stock Exchange in 2012, it was widely seen as a measure to pay off the Glazers’ £400m+ debt associated with their takeover in a leveraged buyout nearly a decade earlier.
And while this is demonstrably true, their listing on the world’s largest trading exchange is also a testament to the importance of their brand.
About 22.5 percent of the club is now publicly owned, just five percent less than the share owned by Sir Jim Ratcliffe, currently the most powerful man at Old Trafford.
When Ratcliffe invested in United in February this year after a lengthy takeover saga, the markets reacted positively.
The share price rose to its highest level since the September 2023 crash, when it was first reported that the Glazers were considering a partial rather than a full sale.
Recent developments in New York suggest that an investment group has taken great advantage of the turmoil caused by the ownership dispute.
Ariel Investments becomes Man United’s third largest shareholder
Ariel Investments, a Chicago-based financial institution, invested in Man United for the first time in 2021.
In November 2022, the Glazers announced that they were exploring strategic investments in the club – possibly with a view to a full takeover.
The share price shot up and Ariel Investments seemed to have recognized an opportunity.
They exited their shares when the share price peaked at $23, selling their 3 million shares for a total of £54 million.
As media outlets such as Sportico reported, Ariel has since bought back most of these shares at a lower price and regained its status as United’s largest single institutional shareholder.
Thanks to the share buyback of the past few weeks, the club now owns a total of 8.3 million shares, which is almost five percent of the company’s share and 15.7 percent of the club’s Class A shares.
What is Ariel Investments’ long-term strategy for Man United?
Although the markets control more than 20 percent of United’s total equity, the company’s charter grants them only three percent of voting rights.
And because the external investments in the club are so diverse, the 20 percent can rarely mobilize to act as a bloc and exercise their three percent say in the club’s management.
So what does Ariel Investments want from United? Yes, United pays a dividend, but the yield is not particularly high.
It is perhaps telling that Ariel Investments’ profile picture on social media platform X is a cartoon turtle holding up a trophy, accompanied by the slogan “He who goes slow and steady wins the race”.
They view United as a value creation project and will cash in when they believe the club has reached its peak value or when a buyer wants to take 100 percent control of the club.
Many investors believe that football is about to make a big bang in terms of untapped revenue, which is why private equity is so heavily involved in the sport.
Many hoped the European Super League would be the holy grail, but that ill-fated breakaway project has failed, so backers will have to wait for now.
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