Rumor has it KKR & Co. (KKR.US) Investing $1 billion to buy sports investment company Arctos to focus on sports and secondary markets

The Zhitong Finance App learned that according to people familiar with the matter, KKR & Co. (KKR.US) has agreed to acquire Arctos Partners, a deal that values the sports and secondary market investment company at around $1 billion and retains its current management team. People familiar with the matter revealed that the two companies are seeking approval for the deal from major US professional sports leagues.

The deal includes incentives to Arctos executives, including co-founder Ian Charles, which could value the company close to $1.5 billion. People familiar with the matter revealed that under the terms of the agreement, Charles will continue to be the head of the company and acquire shares in the New York-based acquisition giant along with other Arctos executives. They will also keep their existing collateral interests — that is, their share of the profits they receive from their investments.

The acquisition of Arctos, with an asset management scale of approximately $15 billion, enabled KKR to gain a foothold in the two major sectors of the booming private equity market — sports and secondary market investment. People familiar with the matter revealed that KKR had also considered acquiring other secondary market investment companies, but in the end, the bid was not high. By the end of September, KKR's assets under management reached US$723 billion.

Arctos is an early pioneer in sports investment, holding shares in the NBA's Golden State Warriors and Utah Jazz, as well as the Los Angeles Dodgers and Houston Astros in baseball. Additionally, it holds shares in the NFL Los Angeles Chargers and the NHL New Jersey Devils.

People familiar with the matter revealed that the league's approval of the deal depends on a number of terms, including verifying whether there is a conflict of interest between athletes, such as acting as a spokesperson for a KKR company.

They said KKR will use its balance sheet to acquire Arctos, which will become part of its asset management business.