David Abrams and Arne Rees have launched Velocity Capital Management, an investment fund focusing on the intersection of sports, media and entertainment.
The fund aims to buy into growth-stage companies with strong business fundamentals and enterprise values up to $2 billion.
Abrams was most recently the chief investment officer of Harris Blitzer Sports & Entertainment, which owns the Philadelphia 76ers and New Jersey Devils, among other sports properties. Rees has been North America CEO of Sportradar, but is stepping down from the role with today’s announcement and moves to the advisory board of the Swiss sports data and analytics company.
“We believe we have differentiated experience, not only investing across multiple asset classes in different industries across many cycles, but actually running, turning around and creating value in different businesses,” said Abrams in a video call. “We believe we have a great plan to take advantage of what our traits are.”
Velocity launches with at least $27 million in assets, the amount reported in a regulatory filing dated Aug. 31. In addition to funds from the co-founders, outside investors in Velocity include Delaware North, the Jacobs family-owned concession firm and owner of the Boston Bruins and Boston’s TD Garden; Germany-based family office Bolt Ventures; Signify Wealth, which is a registered investment advisor serving primarily NFL players; sports marketing and talent agency Remington Ellis; Leeds United soccer player Jack Harrison; and RNW Management, the family office of Apollo Global Management CEO Mark Rowan.
Velocity has already closed on one investment, an equity stake in Camp NYC Inc., an experiential retailer that sells primarily kids merchandise and offers in-store experiences with Disney’s Mickey & Friends and painting and ceramics with Art Camp. The fund also expects to close on another investment soon, according to Abrams.
The two executives see the timing of Velocity as fortuitous, given the market-wide retrenchment of valuations this year. In particular, Abrams’ background in distressed assets—he was co-head of Credit Suisse’s global distress sales and trading group—will be an asset in the current environment, according to the executive.
“What we’re seeing today is not just disruption in the space but also disruption in the market in terms of repricing of valuations,” said Abrams. “That is a great opportunity for a fund that has restructuring and operating expertise, to not just be a capital provider but also an operating partner for business that may have to pivot their plan.”
In particular Abrams pointed to sports betting and NFTs as two areas where values appear to have gotten ahead of themselves and will result in businesses that will need to rethink their approaches. The pair’s background in many aspects of the investing and sports business will allow them to be active partners in helping companies retool, added Rees.
“Having started my career as an investor, my interest has always been investing in sport as an asset class,” said Rees, on a video call. “I was very lucky to look at this business from all different facets—as a seller of rights, a buyer of rights, as an investor and as an operator. I’m fascinated by this whole world as an investable asset class.”
The opportunity to return to investing appealed to Rees and is the reason he is stepping down from Sportradar, where he has led the North American business since late 2020 after having been involved as an investor. Rees is perhaps best known for his work at ESPN, where he held various senior executive positions, and at UEFA, where he was head of strategic business development. He also previously was a partner at MSP Sports Capital.
Abrams and Rees got to know each other well during Sportradar’s 2021 acquisition of Synergy Sports, a combined business that include Keemotion, an investment of Harris Blitzer’s.
“I’m really happy to start this with David,” said Rees. “I think there’s a place for growth-focused fund investor. We now have a lot of proven businesses that have been venture financed and David and I have a real sweet spot in helping them take the next step with our experience.”
With today’s announcement, Velocity also detailed members of its management team. Investment banking veterans Jessica Li and Sarina Crisci are head of investor partnerships and chief operating officer, respectively. The investment team includes Dylan Zane, who worked on sports and entertainment transactions at Evolution Media Capital, and Nishant Jain, who had been at investment firm Blue Point Capital. Touré Clairborne, recently head of consulting and sponsorships at Intersport, is Velocity’s operating partner for firmwide initiatives.
The fund will seek to make investments of up to $50 million for control or non-control stakes of businesses, with a focus on capital preservation and good risk-adjusted returns, according to a press release.
“The repricing in the public markets is creating an excellent opportunity as the private markets recalibrate in response,” said Abrams on the video call. “Now we feel we can be a little more selective. We’re building what we think is a differentiated business.”