ARCTOS

KYCO: Know Your Company

Reveal Profile

4 November 2025

1) Overview of the Company

Arctos Partners, LP is a Dallas-based private investment firm founded in 2019 that operates through two primary strategies: Arctos Sports and Arctos Keystone. The firm is registered as an investment adviser with the U.S. Securities and Exchange Commission since February 25, 2020, with notice filings in New York and Texas effective June 24, 2020. Arctos maintains offices in Dallas, New York, and London, employing 60-70 professionals across investment and operational functions.

The firm manages approximately $14.1 billion in regulatory assets under management as of June 2025, representing a 44% increase from the prior year. Arctos Sports Partners focuses on acquiring minority stakes in professional sports franchises across North America and Europe, while Arctos Keystone provides liquidity solutions and growth capital to alternative asset managers. The sports strategy has become the largest institutional investor in North American sports franchises, with stakes in over 25 teams across MLB, NBA, NHL, MLS, and international leagues.

Recent transformative events include the closure of Arctos Sports Partners Fund II in February 2024 with over $4.1 billion in capital commitments. The firm made history in 2024 by becoming one of the first private equity firms approved to invest in NFL franchises, acquiring a 10% stake in the Buffalo Bills in December 2024 and subsequently investing in the Los Angeles Chargers in May 2025. In February 2025, Arctos completed the acquisition of a majority stake in Hayfin Capital Management through its Keystone strategy.

The firm launched Arctos Capital Markets (ACM) as a dedicated platform to connect qualified high-net-worth investors with direct professional sports ownership opportunities, leveraging proprietary investor networks and data science capabilities. Notable portfolio investments include stakes in the Golden State Warriors, Los Angeles Dodgers, Philadelphia 76ers, Paris Saint-Germain F.C., and Aston Martin Aramco Formula One Team.

2) History

Arctos Partners, LP was founded in 2019 by Ian Charles and David “Doc” O’Connor, establishing the firm as a Dallas-based private investment platform focused on sports franchises and alternative asset managers. The firm registered as an investment adviser with the U.S. Securities and Exchange Commission on February 25, 2020, with notice filings in New York and Texas effective June 24, 2020.

The founding circumstances brought together complementary expertise, with Charles contributing over two decades of private equity and secondary market experience from Landmark Partners and Cogent Partners, while O’Connor brought extensive sports industry leadership from his tenure as President and CEO of Madison Square Garden Company and Managing Partner at Creative Artists Agency. Prior to founding Arctos, O’Connor had overseen MSG’s $700 million annual sports business operations including the New York Knicks and New York Rangers, while Charles had been involved in transactions representing over $10 billion in value at Landmark Partners.

A significant milestone occurred in February 2021 when Arctos launched Arctos NorthStar Acquisition Corp., a special purpose acquisition company that raised $275 million in its initial public offering on the New York Stock Exchange. The SPAC was designed to identify and acquire business combination targets, though it was ultimately liquidated in February 2023 without completing a transaction.

The firm achieved transformational growth with the closure of its inaugural Arctos Sports Partners Fund in 2021, followed by the successful closure of Arctos Sports Partners Fund II in February 2024 with over $4.1 billion in capital commitments. This second fund closure represented a landmark achievement, establishing Arctos as the world’s largest aggregation of institutional capital dedicated exclusively to professional sports investment.

Arctos expanded internationally with the opening of its London office, enabling the firm to pursue European sports investments including the landmark acquisition of a minority stake in Paris Saint-Germain F.C. in December 2023. The firm made history in 2024 by becoming one of the first private equity firms approved to invest in NFL franchises, completing a 10% stake acquisition in the Buffalo Bills in December 2024.

In February 2025, Arctos completed a significant expansion into alternative asset management through its Keystone strategy with the acquisition of a majority stake in Hayfin Capital Management, marking a major diversification milestone for the firm. The firm also launched Arctos Capital Markets as a dedicated platform to connect qualified high-net-worth investors with direct professional sports ownership opportunities.

3) Key Executives

Ian H. Charles serves as Co-Founder and Managing Partner at Arctos Partners since 2019, directing investment strategy, firm governance, and investor relations across both Sports and Keystone strategies. Prior to co-founding Arctos, Charles was a Partner at Landmark Partners where he served on private equity and infrastructure investment committees and helped build the firm’s quantitative research group, participating in transactions representing over $10 billion in value. He previously co-founded Cogent Partners, the first secondary market sell-side advisor, which was acquired by Greenhill & Co. Charles graduated with honors from Texas Christian University with BBAs in Finance and Accounting, received his MBA from the Wharton School, and is a CFA charterholder.

David J. O’Connor serves as Co-Founder and Managing Partner at Arctos Partners since 2019, leading value-creation, sourcing, and execution for the Sports strategy while directing the firm’s business strategy and governance. Prior to founding Arctos, O’Connor was President and CEO of Madison Square Garden Company, overseeing $700 million in annual sports business operations including the New York Knicks and New York Rangers. He previously spent over 30 years at Creative Artists Agency where he served as Managing Partner, beginning in the mailroom and eventually taking over day-to-day management in 1995, leading the creation of CAA Sports. O’Connor graduated from Dartmouth College with a BA and was a four-year letterman in lacrosse.

John B. Vedro serves as Chief Financial Officer and Chief Compliance Officer at Arctos Partners, responsible for the firm’s financial and compliance functions. Vedro is a Certified Public Accountant licensed by the Texas State Board of Public Accountancy. Prior to joining Arctos, he gained experience at organizations including Gauge Capital, KeyCorp LLC, TPG, and Archon Group.

Michael D. Belsley serves as Partner and Chief Legal Officer at Arctos Partners, overseeing all legal functions while directing sourcing and structuring for the Keystone strategy. Prior to joining Arctos, Belsley was a senior partner in the Investment Funds Group at Kirkland & Ellis LLP where he founded the firm’s market-leading liquidity solutions practice, participating in over $465 billion of secondary market transactions during his tenure. He graduated from Northwestern University with both a BA in Economics and Political Science and a JD. Belsley was recognized as a 2025 Legal Innovator by D Magazine at the Corporate Counsel Awards.

Joseph M. Corcoran serves as Partner at Arctos Partners since January 2025, marking the firm’s first internal partner promotion since founding in 2019. Corcoran is responsible for sourcing, evaluation, and management of investments for the Keystone strategy. Prior to joining Arctos, he was a member of the founding team at Stonyrock Partners and previously served as a Vice President at Blackstone on the firm’s inaugural GP Stakes private equity fund, supporting $1.5 billion of investments. He received his BA with honors from Georgetown University and MBA with honors from Columbia Business School.

Gregory C. Baecher serves as Partner at Arctos Partners since 2024, overseeing the firm’s capital solutions group and helping lead corporate strategic initiatives. Baecher joined Arctos after nearly 20 years at Warburg Pincus where he worked across multiple roles including investor, strategy, and fundraising, helping raise over $63 billion in commitments across nine funds. He began his career at J.P. Morgan Chase in real estate and lodging investment banking and credit portfolio groups. Baecher graduated Summa Cum Laude and Phi Beta Kappa from Duke University with a BA in Economics with High Distinction.

Robyn S. Slutzky serves as Partner at Arctos Partners, helping lead the Capital Solutions business with responsibility for capital formation and investor relations activities. Prior to joining Arctos, Slutzky served as Co-Head of Private Equity Due Diligence for JPMorgan’s Private Bank where she led a team overseeing more than $40 billion in client commitments and served on numerous Advisory Boards.

Chad M. Hutchinson serves as Partner at Arctos Partners, leading value-creation, sourcing, and execution for the Sports strategy with responsibility for investment activity in operating companies and real estate. Prior to joining Arctos, Hutchinson was a Managing Director at Sixth Street where he built the agriculture business from inception to a dedicated platform with its own fund. Before his finance career, Hutchinson had an eight-year professional sports career, pitching for the St. Louis Cardinals organization from 1998-2001 and playing football for the Dallas Cowboys and Chicago Bears from 2002-2005. He graduated from Stanford University with a BA in Political Science.

Brian A. Lafemina serves as Partner at Arctos Partners, leading value-creation, sourcing, and execution for the Sports strategy. Prior to his role as Partner, Lafemina served as an Operating Partner and was a member of the Los Angeles 2028 Organizing Committee for the Olympic Games where he served as Chief Business Officer.

4) Ownership

Arctos Partners, LP maintains a private investment firm structure with co-founders Ian H. Charles and David J. O’Connor serving as co-managing partners and holding significant ownership stakes through their roles as members of Arctos Management Company, LLC and limited partners of Arctos Platform Poolco, L.P. The firm is structured as a limited partnership with management control vested in the founding partners who established the company in 2019.

The ownership structure has evolved significantly since the firm’s inception, with substantial growth in assets under management reflecting the expansion of the underlying business. From initial assets of $866 million in December 2020, the firm has grown to manage approximately $14.1 billion in regulatory assets under management as of June 2025, representing a 44% increase from the prior year. This growth trajectory demonstrates the successful capital formation efforts and investor confidence in the firm’s sports and alternative asset management strategies.

Recent ownership developments include the promotion of Joseph M. Corcoran to Partner in January 2025, marking the firm’s first internal partner promotion since founding. This internal elevation reflects the firm’s growth and formalization of its organizational structure as it scales operations across its Sports and Keystone strategies.

The firm operates through multiple affiliated entities including Arctos Sports Partners Fund I GP, LP, Arctos Sports Partners Fund II GP, LP, and Arctos Keystone Partners Fund I GP, LP, which serve as general partner entities for the respective investment funds. These affiliated structures enable the firm to manage its dual-strategy approach of investing in professional sports franchises and providing liquidity solutions to alternative asset managers.

Key ownership control persons include John B. Vedro as Chief Financial Officer and Chief Compliance Officer, and Michael D. Belsley as Partner and Chief Legal Officer, indicating a formalized governance structure with defined executive roles. The firm has maintained its private ownership status without external institutional investors at the management company level, allowing the founding partners to retain full strategic control over the business direction and investment philosophy.

The ownership evolution reflects the transformation from a startup investment firm to a substantial institutional player, with the firm now employing 60-70 professionals across offices in Dallas, New York, and London. This geographic expansion and team growth demonstrate the successful scaling of the ownership platform to support the firm’s expanding investment activities and client base.

5) Financial Position

Arctos Partners, LP has demonstrated substantial financial growth since its founding in 2019, with assets under management expanding dramatically from $866 million in December 2020 to approximately $14.1 billion as of June 2025. This represents a 44% increase from the prior year and reflects the successful execution of the firm’s dual-strategy approach across sports and alternative asset management sectors.

The firm’s financial strength is anchored by the successful closure of Arctos Sports Partners Fund II in February 2024, which raised over $4.1 billion in capital commitments. This fund closure, combined with the firm’s inaugural sports fund and Keystone strategy vehicles, positions Arctos with substantial dry powder for continued investment activity. The sports strategy alone manages approximately $7 billion in assets, making it the world’s largest aggregation of institutional capital dedicated exclusively to professional sports investment.

Revenue generation stems primarily from management fees on committed capital and carried interest from successful investments across both strategies. The firm’s fee structure follows industry standards for private equity funds, with management fees typically ranging from 1.5% to 2.0% of committed capital during the investment period. Performance-based compensation through carried interest aligns the firm’s financial success with investor returns, creating sustainable long-term revenue streams as portfolio investments mature.

The firm’s financial position has been strengthened by its diversified investor base, with approximately 80% of capital coming from institutional investors including pension funds, endowments, sovereign wealth funds, and insurance companies. U.S. pension funds represent approximately 26% of the capital raised in the sports strategy, demonstrating strong institutional acceptance and providing stable, long-term capital sources.

Recent financial developments include the February 2025 completion of the acquisition of a majority stake in Hayfin Capital Management through the Keystone strategy, representing a significant expansion of the firm’s fee-paying assets under management. This transaction diversifies the firm’s revenue base beyond pure investment activities to include ongoing management of alternative asset management platforms.

The firm’s financial infrastructure supports operations across multiple jurisdictions, with regulatory registrations and compliance frameworks in place for the United States and United Kingdom markets. Form ADV filings indicate the firm maintains appropriate operational infrastructure relative to its asset base, with 60-70 professionals across investment and operational functions.

Capital expenditures focus on technology infrastructure, particularly the firm’s Arctos Insights data science platform, which supports investment decision-making and value creation initiatives. The recent launch of Arctos Capital Markets as a dedicated platform for high-net-worth investor access represents additional investment in proprietary technology capabilities and revenue diversification.

The firm’s financial outlook benefits from several structural tailwinds, including continued institutional investor allocation to alternative investments, growing acceptance of sports as an institutional asset class, and increasing demand for liquidity solutions among alternative asset managers. The six-year minimum holding period required for NFL investments and similar restrictions across other sports leagues provide visibility into long-term capital deployment timelines.

6) Market Position

Arctos Partners, LP has established itself as the dominant institutional investor in North American professional sports franchises, holding equity stakes in over 25 teams across MLB, NBA, NHL, MLS, and international leagues. The firm is the only private investment firm approved to hold equity stakes across all five major North American professional leagues, providing unparalleled market access and deal flow advantages in the sports investment sector.

The firm’s market leadership position was solidified through its historic entry into the National Football League in 2024, becoming one of the first private equity firms approved to invest in NFL franchises following the league’s policy change. Arctos completed investments in the Buffalo Bills and Los Angeles Chargers, establishing first-mover advantage in the world’s most valuable sports league with teams averaging over $5 billion in enterprise value.

Geographic market positioning spans North America and Europe, with significant investments including Paris Saint-Germain F.C. and Aston Martin Formula One Team demonstrating the firm’s ability to execute complex international transactions. The London office expansion enables direct access to European sports markets and provides operational capabilities for continued international growth.

Arctos Sports Partners Fund II’s $4.1 billion closure in February 2024 represents the world’s largest aggregation of institutional capital dedicated exclusively to professional sports investment, providing significant competitive advantages in deal sourcing and execution. This scale advantage enables the firm to participate in larger transactions and provide more substantial capital solutions to franchise owners compared to smaller or generalist competitors.

The firm’s Keystone strategy addresses the growing market demand for liquidity solutions among alternative asset managers, with the February 2025 acquisition of Hayfin Capital Management representing a flagship transaction in this sector. The alternative asset management industry’s continued growth and increasing need for strategic capital creates substantial market opportunities for expansion of this strategy.

Competitive differentiation stems from the firm’s specialized focus, proprietary data science capabilities through Arctos Insights, and the unique combination of private equity expertise and sports industry operating experience provided by the founding team. The partnership with the University of Michigan to create the Ross-Arctos Sports Franchise Index (RASFI) establishes thought leadership and market transparency in sports franchise valuation.

The launch of Arctos Capital Markets in September 2025 demonstrates strategic market expansion into high-net-worth investor channels, leveraging the firm’s institutional market position to access additional capital sources. This platform connects qualified investors with direct sports ownership opportunities, creating new revenue streams while enhancing the firm’s overall market ecosystem.

Market timing advantages include the continued institutional acceptance of sports as an alternative asset class, with pension funds, endowments, and sovereign wealth funds increasingly allocating capital to sports investments. The firm’s early-mover advantage and purpose-built infrastructure position it to capitalize on this structural shift in institutional investor behavior.

Industry relationships provide sustainable competitive advantages, with the firm’s portfolio companies including marquee franchises across multiple leagues and geographies. These relationships create deal flow through existing ownership groups, league introductions, and operational partnership opportunities that are difficult for competitors to replicate.

The firm faces limited direct competition from institutional investors with comparable scale, sector focus, and track record in sports investing. While family offices and high-net-worth individuals remain active in sports ownership, few institutional platforms have achieved Arctos’s combination of capital scale, league relationships, and operational expertise across multiple sports and geographies.

7) Legal Claims and Actions

Based on comprehensive review of available regulatory and legal sources, Arctos Partners, LP demonstrates a notably clean regulatory and legal record since its founding in 2019. The firm maintains SEC registration in good standing with no identified enforcement actions, penalties, or sanctions from the Securities and Exchange Commission.

The firm’s Form ADV filing contains no disclosed legal proceedings, regulatory violations, or material adverse events requiring disclosure under federal securities laws. As a registered investment adviser since February 25, 2020, Arctos has operated without any documented violations of the Investment Advisers Act of 1940 or related securities regulations during its operational history.

There are no identified criminal convictions, civil litigation settlements, or regulatory enforcement actions involving the firm’s senior executives or key personnel. The extensive regulatory database searches reveal no proceedings involving co-founders Ian H. Charles or David J. O’Connor, nor any other members of the senior leadership team including Chief Financial Officer and Chief Compliance Officer John B. Vedro.

The firm has not been subject to any whistleblower protection violations, recordkeeping failures, or other compliance-related enforcement actions that have affected numerous investment advisers and broker-dealers in recent years. Arctos was not included in the SEC’s widespread enforcement actions targeting firms for off-channel communications violations that resulted in over $600 million in penalties across more than 70 firms, nor was it among the institutional investment managers charged with Form 13F filing failures.

No employment litigation, discrimination claims, or workplace misconduct allegations have been identified through systematic legal database searches. The firm has not been subject to any customer complaints, arbitration proceedings, or investor disputes requiring regulatory disclosure or public documentation.

The firm maintains its registration status with notice filings in New York and Texas, with no disclosed compliance deficiencies or regulatory examination findings requiring corrective action. Arctos operates across multiple jurisdictions including the United Kingdom through Arctos Europe LLP, with no identified regulatory violations or enforcement actions in international markets.

The comprehensive absence of legal claims, regulatory enforcement actions, or material litigation during the firm’s six-year operating history reflects strong compliance practices and risk management protocols relative to industry standards for private equity firms of comparable size and complexity.

8) Recent Media Coverage

Media coverage of Arctos Partners, LP between 2023 and 2025 is overwhelmingly positive, focusing on significant fundraising success, strategic expansion into new asset classes, and high-profile, landmark investments in professional sports franchises. A comprehensive review of regulatory filings, legal databases, and media reports found no instances of fraud, misconduct, regulatory/legal actions, cybersecurity incidents, or major client losses involving the firm or its senior executives during this period.

The firm’s fundraising activities received extensive coverage, culminating in the April 2024 final close of Arctos Sports Partners Fund II at over $4.1 billion, exceeding its $2.5 billion target. This raise, which brought the firm’s sports-related assets under management to approximately $7 billion, was supported by a global investor base including pension funds, endowments, and insurance companies. In July 2023, the firm announced the launch of a new strategy, Arctos Keystone, to provide growth capital and liquidity solutions to alternative asset managers, with reports indicating it was targeting $4.0 billion for its inaugural fund in this strategy.

A major theme in recent media has been Arctos’s historic entry into the National Football League (NFL). Following the NFL’s approval in August 2024 to permit private equity investment, Arctos was named one of the few “whitelisted” firms. This was followed by the acquisition of a 10% minority stake in the Buffalo Bills in December 2024, one of the first such deals in the league’s history. The firm continued its NFL investment activity by acquiring a minority stake in the Los Angeles Chargers in May 2025. Co-founder David “Doc” O’Connor described the NFL entry as a “validator” of the firm’s thesis in an interview in January 2025.

Key international investments were also widely reported, including the December 2023 acquisition of a 12.5% stake in French soccer club Paris Saint-Germain F.C. at a valuation of about €4 billion. In November 2023, Arctos acquired a minority interest in the Aston Martin Formula One team in a deal that valued the racing group at approximately £1 billion. Other notable transactions included an increased investment in Harris Blitzer Sports & Entertainment (owner of the Philadelphia 76ers and New Jersey Devils) in 2023 and an additional stake in the NHL’s Tampa Bay Lightning in June 2023, which required a special waiver from the league as it put Arctos over the 20% ownership cap for a single fund. In August 2024, it was reported that Arctos was expected to exit some or all of its stake in the Tampa Bay Lightning as part of a sale of the team.

The firm has actively expanded its strategies and platform. In February 2025, Arctos completed a management buyout of Hayfin Capital Management, a European alternative asset manager, through its Keystone strategy. In March 2025, Arctos announced the formation of Arctos Keystone Real Assets, expanding into real estate and real assets by hiring a team from Crow Holdings. In September 2025, the firm launched Arctos Capital Markets (ACM), a new business line to connect high-net-worth investors with sports ownership opportunities; ACM reportedly facilitated the sale of a controlling interest in the Tampa Bay Lightning. Reports from May 2025 indicated that European private equity firm EQT AB was exploring a potential strategic tie-up with Arctos.

Public statements from executives provided insight into the firm’s strategy. In a January 2025 interview, co-founder Ian Charles characterized the college sports landscape as “very unstable and unpredictable,” stating the firm was not comfortable investing in the space until there is more stability. In September 2025, Charles commented on the broader private equity market, predicting an increase in “zombie funds” due to a challenging fundraising environment. The firm also engaged in thought leadership, publishing a white paper in September 2025 arguing that sports franchise valuations are driven by fundamentals rather than just asset scarcity. In November 2023, Arctos announced a partnership with Oak View Group’s GOAL sustainability platform to provide data and insights to advance sustainability initiatives in the sports industry. A SPAC sponsored by the firm, Arctos NorthStar Acquisition Corp., was liquidated in February 2023 after being launched in February 2021, as it did not complete an initial business combination.

9) Strengths

Experienced Leadership Team

Arctos Partners benefits from a highly experienced and complementary founding team that combines deep private equity expertise with extensive sports industry operating experience. Co-founder Ian Charles brings over two decades of private equity and secondary market experience from leadership roles at Landmark Partners and as co-founder of Cogent Partners, the first secondary market sell-side advisor. His partner David “Doc” O’Connor contributes over 30 years of sports and entertainment industry leadership, including his tenure as President and CEO of Madison Square Garden Company and Managing Partner at Creative Artists Agency, where he built CAA Sports into the leading sports agency worldwide. This combination of private equity sophistication and sports industry expertise provides the firm with unique market access and operational insights.

Market-Leading Sports Investment Platform

Arctos has established itself as the largest institutional investor in North American sports franchises, with over 25 portfolio franchises across multiple leagues and the only private investment firm approved to hold equity stakes across all five major North American professional leagues. The firm closed its second sports fund at over $4.1 billion in February 2024, making it the world’s largest aggregation of institutional capital dedicated exclusively to professional sports investment. This scale and market leadership position provides significant competitive advantages in deal sourcing, league relationships, and industry influence.

Specialized Investment Focus and Expertise

The firm’s exclusive focus on sports franchises and alternative asset managers through its dual-strategy approach provides deep sector specialization that is difficult for generalist private equity firms to replicate. Arctos Sports Partners has become the go-to partner for professional sports franchise owners seeking liquidity solutions and growth capital, while Arctos Keystone addresses the growing need for strategic capital among alternative asset managers. This specialization has enabled the firm to develop proprietary insights, data capabilities, and industry relationships that create sustainable competitive advantages.

Proprietary Data Science and Research Platform

Arctos has developed sophisticated data science capabilities through its Arctos Insights platform, which provides quantitative research and analytics to support investment decisions and value creation initiatives. The firm partnered with the University of Michigan to create the Ross-Arctos Sports Franchise Index (RASFI), which benchmarks sports franchise investment performance and provides transparency to the market. These proprietary analytical capabilities, combined with the firm’s extensive database of minority owners and market participants, create valuable information advantages in deal sourcing and underwriting.

Strong Institutional Investor Base

The firm has successfully attracted a diverse global institutional investor base, with approximately 80% of capital coming from institutional investors including pension funds, endowments, sovereign wealth funds, and insurance companies. U.S. pension funds represent approximately 26% of the capital raised in the sports strategy, demonstrating strong institutional acceptance of sports as an asset class. This institutional backing provides stability, credibility, and substantial dry powder for continued growth and opportunity capture.

Unique Market Access and League Relationships

Arctos’s first-mover advantage and purpose-built structure for sports investing has enabled the firm to develop exclusive relationships across multiple professional sports leagues. The firm made history in 2024 by becoming one of the first private equity firms approved to invest in NFL franchises, completing investments in the Buffalo Bills and Los Angeles Chargers. This unique access extends across international markets, with investments in Paris Saint-Germain F.C. and Aston Martin Formula One Team, positioning Arctos as a global leader in sports investing.

Proven Track Record and Performance

Since inception in 2019, Arctos has demonstrated strong performance across its investment strategies, with assets under management growing from $866 million in December 2020 to approximately $14.1 billion as of June 2025, representing a 44% increase from the prior year. The firm’s track record includes successful exits and value creation across its portfolio, supported by its data-driven investment approach and deep industry expertise.

Innovative Capital Solutions Platform

The recent launch of Arctos Capital Markets (ACM) demonstrates the firm’s ability to innovate and expand its platform capabilities. ACM connects qualified high-net-worth investors with direct professional sports ownership opportunities, leveraging the firm’s proprietary investor network and data science platform to create additional liquidity solutions for the sports ecosystem. This platform expansion enhances the firm’s value proposition to portfolio companies and creates new revenue streams.

10) Potential Risk Areas for Further Diligence

Concentrated Investment Strategy Risk

Arctos Partners, LP operates with a highly specialized focus on professional sports franchises and alternative asset managers, creating significant concentration risk within niche asset classes. The firm’s sports strategy is heavily dependent on the continued growth and stability of professional sports valuations, which while historically resilient, remain subject to potential disruption from economic downturns, league governance changes, or shifts in consumer entertainment preferences. This concentration exposes investors to sector-specific risks including regulatory changes affecting sports ownership structures, potential labor disputes that could impact franchise operations, and evolving media consumption patterns that might affect long-term revenue streams.

Private Equity Industry “Zombie Fund” Risk

Co-founder Ian Charles has publicly acknowledged the challenging fundraising environment facing private equity firms, predicting an increase in “zombie funds” due to difficult capital raising conditions. While Arctos has demonstrated strong fundraising capabilities with over $4.1 billion raised for its second sports fund, the firm operates within an increasingly competitive landscape where many mid-market firms may struggle to maintain growth trajectories. This industry-wide challenge could impact the firm’s Keystone strategy, which focuses on providing liquidity solutions to alternative asset managers who may themselves face fundraising difficulties or performance pressures.

Complex Multi-Jurisdictional Regulatory Environment

The firm operates across multiple jurisdictions including the United States, United Kingdom, and various international markets through its sports investments, creating exposure to complex and evolving regulatory frameworks. Recent NFL rule changes permitting private equity investment demonstrate how league governance decisions can materially impact investment parameters, and similar regulatory shifts across other professional sports leagues could affect the firm’s investment thesis. Additionally, the firm’s international expansion, particularly through its London office and European investments such as Paris Saint-Germain F.C., introduces regulatory compliance complexities across different legal systems and potential exposure to changing foreign investment regulations.

Key Person Dependency and Succession Planning

Arctos’s success is significantly dependent on its co-founding partners Ian Charles and David O’Connor, who bring complementary but highly specialized expertise in private equity and sports industry operations respectively. The firm has recently promoted its first internal partner since founding, but the concentration of institutional knowledge and industry relationships in the founding team creates potential succession planning challenges. Given the relationship-driven nature of both sports franchise ownership and alternative asset management, the departure of key personnel could materially impact deal flow, investor relationships, and the firm’s ability to execute its specialized investment strategies.

Market Valuation and Liquidity Concerns

While Arctos has published research arguing that sports franchise valuations are driven by fundamentals rather than scarcity, the firm operates in markets with limited liquidity and potentially elevated valuations. Sports franchise transactions remain infrequent and highly relationship-dependent, potentially creating challenges for portfolio exits and limiting the firm’s ability to provide liquidity solutions to investors when needed. The six-year minimum holding period required by the NFL and similar restrictions across other leagues could create timing mismatches between investor liquidity needs and available exit opportunities.

Operational Infrastructure and Scaling Challenges

As Arctos has rapidly grown from $866 million in assets under management in December 2020 to approximately $14.1 billion as of June 2025, the firm faces significant operational scaling challenges. The 44% increase in assets under management from the prior year, combined with expansion into new asset classes through the Keystone strategy and geographic expansion through the London office, creates pressure on operational infrastructure, compliance systems, and investment management capabilities. The firm’s ability to maintain investment performance and operational excellence while managing this rapid growth trajectory represents a material operational risk.

Technology and Cybersecurity Vulnerabilities

Given the firm’s emphasis on data science capabilities through its Arctos Insights platform and the proprietary nature of sports franchise financial information, cybersecurity risks pose significant operational and reputational threats. The firm’s handling of sensitive financial data from high-profile sports franchises and institutional investors, combined with its multi-jurisdictional operations, creates exposure to cyberattacks that could compromise confidential information and damage client relationships. Additionally, the firm’s reliance on technology platforms for research, portfolio management, and investor relations creates potential operational disruption risks from system failures or security breaches.

ESG and Reputational Risk Management

The firm’s investments in high-profile sports franchises expose it to significant reputational risks stemming from the conduct of team owners, players, or league officials. Sports franchises often face public scrutiny regarding player conduct, workplace culture, diversity and inclusion practices, and social responsibility initiatives, any of which could create negative publicity that affects franchise valuations and investor sentiment. The firm’s Form ADV indicates limited consideration of adverse sustainability impacts, which may create exposure to evolving ESG expectations from institutional investors and regulatory requirements.

Alternative Asset Manager Credit and Performance Risk

The Keystone strategy’s focus on providing liquidity solutions to alternative asset managers creates exposure to counterparty credit risk and performance-dependent success. The strategy involves complex structured transactions with asset managers who may themselves face performance pressures, fundraising challenges, or operational difficulties. Changes in the broader alternative investment landscape, including increased competition, regulatory changes affecting private equity and hedge fund operations, or shifts in institutional investor allocation preferences, could materially impact the success of this strategy.

Sports Industry Regulatory and Governance Evolution

Professional sports leagues continue to evolve their governance structures, ownership rules, and revenue-sharing arrangements, creating ongoing regulatory uncertainty. Recent changes such as the NFL’s approval of private equity investment demonstrate how league decisions can materially impact investment opportunities and restrictions. Future changes to salary cap structures, revenue-sharing agreements, playoff formats, or league expansion could affect franchise valuations and the firm’s investment thesis. Additionally, potential changes to sports betting regulations, media rights structures, or international expansion policies across various leagues could create both opportunities and risks for the firm’s portfolio.

Sources

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