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BlackRock begins PE foray with $875M bet on Sports Illustrated backer

Adam Lewis

BlackRock has found its first target for its private equity strategy.


 


The world's largest asset manager has agreed to invest $875 million in

Authentic Brands Group in a deal that reportedly values the brand management company at more than $4 billion. Singapore's sovereign wealth fund GIC invested $150 million and Jasper Ridge Partners invested $80 million as part of the deal, according to CNBC. 



BlackRock will now become the biggest shareholder of ABG, which manages over 50 brands, including

Sports Illustrated,

Aeropostale and

Nine West, as well as the likenesses of celebrities including Shaquille O'Neal, Muhammad Ali and Elvis Presley. 



The deal marked the first investment for BlackRock's inaugural Long-Term Private Capital fund, a PE vehicle that's expected to hold companies for at least 10 years. So far, the fund has disclosed just $2.75 billion after the asset manager publicly announced it was seeking between $10 billion and $12 billion, which would help Laurence Fink's outfit join a select group of PE shops capable of pulling in 11-figure sums for a single vehicle. But the money manager struggled early on to find LPs, as the team was not yet built out, according to The Wall Street Journal. 



Fink himself reportedly was involved in due diligence for the ABG investment, meeting with two top company executives during a two-hour meeting in the lead-up to the deal. The company was ultimately plenty attractive, as it generates nearly $10 billion in annual revenue from portfolio of brands spanning over 70 countries. And it sounds like BlackRock will help it continue as a prolific brand acquirer. 



"BlackRock's scale, global footprint and digital capabilities will enable us to build out our organization and continue our domestic and international growth trajectory," ABG CEO and founder Jamie Salter said in a press release. 



Authentic Brands has its own history of PE backing. The company was launched in 2010 with a $250 million investment from

Leonard Green & Partners,

Knight's Bridge Capital and Salter, the latter of whom will reportedly retain a 20% stake in the company along with his family.

Lion Capital acquired a minority stake in Authentic Brands in 2016, with

General Atlantic investing in the business a year later. 



The company has been scooping up brands in the lifestyle, entertainment, fashion and sports industries for almost a decade. It recently made headlines when it bought Sports Illustrated from

Meredith in May for $110 million, then sold the iconic publication's print and digital publishing rights the next month for $45 million to digital media company Maven, which will essentially run the company until 2029. 



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