The Galileo fund will invest largely in football, but not through clubs or players. Rather it has teamed up with Betfair.com, the online betting company, and will trade on football statistics and probabilities, using technical and historical analysis
Tony Woodhams, Centaur's managing director argues investing in sports betting provides an alternative investment which is not correlated to the state of the wider UK economy. But there are other reasons for football rising up the investor agenda, with the likes of Manchester United – upping exposure to faster growing fan bases in Asia.
For fund investors the question really is just how much traction there will be in such leisure focused activity.
Within the IMA UT & OEIC universe, there are 11 funds which at least a five per cent exposure to the leisure sector, according to Financial Express data.
Of these, the CF Ruffer Japanese fund and the t1ps Smaller Companies Growth fund have the highest exposure – eight and 10 per cent respectively.
The t1ps fund, which has no Asian exposure, has topped returns of these 11 funds since it launched in May 2009. Over the period it returned 24.6 per cent against the Ruffer Japanese fund's 5.9 per cent.
Varying risk of leisure; Ruffer vs. T1ps fund over 6mths.
Source: Financial Express Analytics
"Investors would have to be mad to invest in football," manager Tom Winnifrith says.
"Warren Buffett’s definition of a good company is one that has a limit on capital expenditure, a reliable income, and no competition. Football manages to be the opposite of all of these things."
But Woodhams remains positive in the benefits of the beautiful game.
"Man United statistics generate a lot of interest as the team is very liquid across various exchanges. There has to be liquidity in the sport for the company to generate profit, which is why we focus more on football," he says.
But is football indeed fickle: debt-stricken Crystal Palace went into administration in January, and Portsmouth Football Club followed suit last month.
There is some confidence out there; the London Nominees Football Fund, launched late last year, has targeted returns of seven per cent for its first year, nine per cent in the second, and 10-12 per cent by its third year.
"Football is certainly a good place to invest – it's completely uncorrelated to other asset classes – and sports investing is becoming a brand new asset class of its own," says Harpreet Sajjan, investment consultant at Business Class Group, which distributes the London fund.
"The football fund is starting to pick up greater interest given the run up to the end of the season – which is where deals in the industry tend to pick up – especially with the World Cup this year," he adds.
IFAs are less confident on the prospect, however.
"Football has a lot of emotion attached, so it does generate a significant amount of interest, but it’s not a safe place to be investing. A lot of the big clubs are struggling with massive debts – as was demonstrated by Man United’s bond issue earlier this year. It's more an area for the high-end investor looking for diversification. It's hard to know what returns you'd get." Ben Willis, AFI panelist and investment manager at Whitechurch Securities says.
Chris Wise, IFA at Bentley Jennison agrees. "Sport is a highly specialised area, and there's not much track record of how these funds perform. There have been attempts to move football investment which haven't come to much," he says.