Athletes have ‘a big responsibility’ in investing, Islanders’ Anders Lee says
Patricof Co. Founder and CEO Mark Patricof and New York Islanders Captain Anders Lee speak with Yahoo Finance Live about how to get more professional athletes involved in investing.
DAVE BRIGGS: More than 30 years after Kevin Costner forever connected baseball to an Iowa farm and field of dreams, a group of professional athletes from the NFL, NBA, and NHL are collectively invested in Iowa farmland. Bengals QB Joe Burrow, NBA star Blake Griffin, and New York Islanders captain Anders Lee all part of an investment group led by a private investment platform, Patricof Co. Andrews joins us now, along with Patricof founder and CEO, Mark Patricof. Nice to see you, guys.
MARK PATRICOF: Thank you.
DAVE BRIGGS: Pleasure having you here. So Mark, I want to ask you first, why a huge group of current and former professional athletes, and how did you get them together?
MARK PATRICOF: So, first of all, to me, having been an investment banker for a long time, I understood that access to the best deals is what we're all looking for. And I had met a handful of professional athletes by co-hosting a television show with Rob Gronkowski a few years ago, a kind of a "Shark Tank" for pro-athletes. Nothing you need to look on the video library to see, but I kind of learned over the course of the 36 episodes we shot that these athletes have incredible relevance and access, but don't really know how to use it to access private deals.
So they may have good wealth managers who manage their liquid assets and stocks and bonds and good contract agents and marketing agents, but no one was advising them on where to deploy the 10% to 20% of their net worth that should have went to private deals. So that was where the idea came from and built it from day one with our first client, and now we have a couple hundred.
DAVE BRIGGS: And is--
MARK PATRICOF: One of my favorites is right here.
DAVE BRIGGS: Yeah, of course. We love hockey players here. What drew you to this opportunity, Anders?
ANDERS LEE: When I got introduced to these guys a couple of years back, I think, for me, my point in my career and where I was, I hadn't delved into this side of investing before and had always been interested from school. And then we kind of just built a really nice trustworthy relationship and one where I could be an active investor, and while I'm doing this, learn a lot about it.
DAVE BRIGGS: How have you seen that side of it evolve? I mean, years ago, every athlete essentially went broke after their playing deals because people got them to slap their name on a car dealership or a sports bar, and they lost their money. And now it's athletes as investors. How have you seen that evolution take shape?
ANDERS LEE: I think there's a big responsibility that we have. I mean, we're put in positions to make good decisions. And you want to really take advantage of these opportunities that we have. But it's really about just being smart, doing the best you can, and being knowledgeable with all this stuff. Doing stuff blindly puts you in a tough spot. So I think with these kind of relationships and being able to really just have the opportunity to learn what you're doing is really important.
DAVE BRIGGS: Do the leagues talk about it now more than they used to?
ANDERS LEE: Yeah, they did. I mean, I remember when I was a rookie, we were sent off in a big little camp. And the NHL walked us through on all the importance of saving your money, investing it correctly, and surrounding yourself with a team that has the same values that you have and one that can look out for you. So yeah, there's a big importance on taking care of yourself.
DAVE BRIGGS: Which gets us to Joe Burrow, Anders, and Zach Ertz and these Blake Griffin. An Iowa farmland, why?
MARK PATRICOF: Well, first of all, just to be clear, we've done 21 investments with our colleagues and business partners, like Anders. Only a couple of them are in the real estate space. One was a multifamily housing project in Florida. Farmland to me was interesting. First of all, we talked about it off the air. There are a lot of very well known successful people-- Warren Buffett, Jeff Bezos, Bill Gates-- who have invested in farmland, number one, so it's not-- never a bad idea to follow smart people. Don't have to be the smartest person in the room always to make decisions.
Second thing is, it's a really good inflation hedge. So we like it as a time and point in this industry. And in this economy, we thought it was a smart place to put some money for someone who's sub 35 years old, has a really good net worth today, wants to maintain and grow that net worth, may not earn at the same level for the next 50 years. So think about it as a long-term investment opportunity. Also, you can do well and do good, the idea of being supportive to farmers. We're not managing the farm. We lease out the farm.
This was the first of what will be probably a half dozen or so farms that we'll acquire full kind of portfolio of farms. It won't all be in Iowa. But the thinking for us was this was a place that a person who's got a thoughtful approach to how to deploy their own personal capital should put some percentage of that into an investment opportunity like this that will generate a certain type of predictable return over a long period of time.
DAVE BRIGGS: What type of investments do you look for? Do you tailor them specifically to guys like Anders?
MARK PATRICOF: No, because the same way Anders wouldn't ask me for a hockey tip, we're trying to find things that we think are the best investments, but that also match interest. So we've invested in a lot of consumer product companies, a bunch of things in the auto space, some things in travel and hospitality.
We invested in Virgins Cruise Line. We invested in a company that provides aftermarket truck parts and accessories for pickup trucks and Jeeps. So we like them to have an interest and affinity. So our goal is not to have each of the 200 athletes invest in every deal, but to have each of the athletes have a point of view in each of our deals.
DAVE BRIGGS: And what type of investments interest you in particular, Anders? And this is something you talk about now amongst your fellow professional athletes?
ANDERS LEE: Yeah, I mean, I like the one sometimes that I see in my daily life, like we did the RealTruck one and Bamba, things that I've seen around and have used--
DAVE BRIGGS: That you can relate to.
ANDERS LEE: Relate to, things I've used before. Even looking into the alcohol space, you know, that kind of thing is really interesting to me to see how they can grow, where they start, and sometimes how far they have to go to be successful. And you can kind of see trends throughout them. At least in that space, I've been familiar with a little bit. And it's pretty cool to see how that works.
DAVE BRIGGS: I think there was a crossover coming between alcohol and the farmland. Is that right, Mark?
MARK PATRICOF: Uh, you tell me.
DAVE BRIGGS: Is there a coming project? There was--
MARK PATRICOF: We look at things in all space. We've done a couple of liquor deals.
DAVE BRIGGS: A well known alcohol brand was referenced in a piece about this project.
MARK PATRICOF: Oh, well, we invested in All Smoky Whiskey. That's what you're thinking of, sorry. We think about things that are obviously categories where we know there's going to be growth, the businesses we look at. And by the way, you mentioned learning. We've done a ton with our athlete clients around teaching, but teaching peer-to-peer versus speaking down to them, which I think has happened a lot in the history of sports.
And we select clients really carefully. We turn out athletes all the time. Because we want ones who want to engage with what we're doing and become thoughtful, smart investors. And if they want to go off and do it on their own without us in other ways, they're obviously, of course, welcome to do that, and we encourage it. So but the categories that we focus on are businesses that we understand the product, we understand the supply chain, we understand the marketplace for exit, which is really important. So we're not investing in something that could take 10 years to get out of.