Bermuda-based soccer fund sues after soccer investment
A Bermuda-based soccer fund is suing an international sports agency that specialises in football rights.
Local lawyer Nick Hoskins is the administrator of the Global Eleven soccer investment fund, whose backers include the son of an Italian count.
It is suing the Swiss agency Kentaro, saying it failed to return profits from matches played by five-time world champion Brazil.
The company is currently in litigation with Kentaro for breach of contract and for non-payment of amounts due and ongoing under those contracts, Global Eleven administrator Mr Hoskins, who is with the firm of Wakefield Quin, said in a statement to Bloomberg. Until this matter is resolved, it isnt possible to comment any further.
According to Bloomberg, Global Eleven raised as much as $20 million to invest in marketing rights for exhibition games played by Brazil that Kentaro held until last year.
The fund also bet on the transfer rights of players from South America where groups lend money to teams in return for a stake in the sale price of athletes. The sports governing body is mulling whether to ban the practice.
Global Elevens suit against Kentaro seeks about $8 million in damages, said two people familiar with the matter.
Bloomberg reported most of the claim is linked to Brazils exhibition games, which Kentaro began promoting in 2006. The rest is tied to loan fees the fund allegedly should have been paid after players were placed with European teams, said the people, who asked not to be identified because of the pending case.
Kentaro Chief Operating Officer Jonathan Hill and company spokesman Johannes Berendt declined to comment.
Global Eleven was set up by Indoo Sella Di Monteluce, an Italian aristocrat, and Kentaro chief executive officer Philippe Huber, whose company is an investor. Iveagh Ltd, a London-based firm created to oversee the wealth of the Guinness brewing dynasty, was hired as investment manager in return for 2 percent of the funds net asset value. Iveagh spokesman Paul Wynne declined to comment. Sella Di Monteluces father, Count Nicolo Sella Di Monteluce, is a non-executive director at Iveagh, which also manages his familys money.
London-based Syrian businessman Khaled Chehabi, a former Iveagh employee, helped double the funds size by attracting investment from the Abu Dhabi-based Baniyas Sports Club and Qatar-based conglomerate Ghanim Bin Saad Al Saad & Sons Group Holdings, two of the people said. The sports clubs president is United Arab Emirates Deputy Prime Minister Sheikh Saif bin Zayed Al Nahyan.
GSSG, named for its chairman Ghanim Bin Saad, the CEO of state-owned Qatari Diar Real Estate Investment Co, is the funds biggest investor after providing as much as $10 million.
Global Elevens player-investment business, which aimed to profit from betting on the increase in value for South American players, failed to make a profit from its investments, according to company documents obtained by Bloomberg.
Buying player rights carries significant risks, said Jochen Loesch, president of international business at Traffic Sports, one of soccers biggest investment funds. It spent more than $75 million on purchasing stakes since 2007.
We have huge downside, he said. If the player isnt sold, we dont get a penny.
According to Global Eleven documents, the fund has invested in nine players and has an agreement with Africa Soccer Developments, a youth academy in Cape Town, for a 50 percent share of any profits from player sales.
The biggest outlay was on Paraguayan attacking midfielder Rodrigo Rojas, 25. The all-in cost to acquire a 40 percent stake in Rojas was $909,000, with the remainder shared between his first team Club Olimpia and Argentine sports agency Full Play, according to company documents.
The funds minimum acceptable transfer price for Rojas was $2,775,974, according to the 2012 papers. Rojas now plays for Chilean team OHiggins, which is paying $40,000 for the remaining 18 months of his contract. In 2011, he spent a few months with a lower-ranked team in Belgium, an entrance point for more lucrative European leagues for players from outside the continent.
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