Hedge Fund Delays IPO For A1GP Series, Seeks Sponsors

A1GP Having Trouble Gaining Momentum Since Starting In ‘04

The A1 Grand Prix (A1GP), the int’l car racing series that launched in ‘04, has “hit some serious speed bumps,” as it “hasn’t signed an international sponsor, the cost of holding its races is spiraling upward, some events have been canceled or are in danger of not being run again, and the IPO [slated for this month] has been delayed,” according to Camilla Webster of the WALL STREET JOURNAL. RAB Capital’s Special Situations hedge fund in December paid $200M for 80% of the series, in which “largely unknown young drivers” compete for their respective countries in 11 events. Octagon Racing Group Exec VP Mark Coughlin: “I don’t know that RAB fully understood what they were buying. ... No one knows the drivers, the cars are uninteresting and the xenophobic concept of my-country-racing-against-yours doesn’t hold water because America’s best drivers aren’t competing, or (the best) drivers from other countries.” A1GP CEO Pete da Silva said the series lost $240M in the ‘05-06 season. Webster adds A1GP teams are “having difficulty attracting sponsors to defray the [$3-5M] a year it cost them to operate.” Geico, which sponsored the U.S. team last year, is no longer doing so. Also, sponsorship deals were turned down by Coca-Cola and Lenovo, which “signed instead with Formula One” (WALL STREET JOURNAL, 4/24).