Typically loans are in excess of £2 million and structured around future rights to cash flows. Over the past five years Investec’s specialised lending division has provided lending facilities worth around £250 million to a number of sporting corporations (including Premiership football and rugby clubs) and rights holders. The success of this facility and demand from individual stars led Investec to pilot a specialist service to lend to individual sports persons and entertainers who meet certain criteria. During the pilot, Investec lent in excess of £30 million.
Investec believes that the recent upsurge in demand for specialist lending facilities is partly because an increasing number of sports and entertainment stars are looking at ways to broaden their portfolios, but do not have readily available assets to use.
Jason Traub of Investec Private Bank said: “Leading sportsmen and entertainers are increasingly regarded as global brands, but despite reliable receivables are often unable to raise funds to invest in business activities or broaden their investment portfolios. In addition to top sports clubs looking to raise additional finance, we’ve lent to a number of well-known sports individuals and entertainers on an ad hoc basis.
“This new service will focus on these stars. We have an excellent understanding of the covenants required for this type of lending and believe that this will be a major growth area for us over the next 12 months and beyond.”
Investec offers a unique approach by lending to sports and entertainment stars against a range of reliable receivables typically not understood by other private banks. These include: image rights, royalties, sponsorship deals and other third party interests.