Former Man City defender Ray Ranson is starting an "Internet-based sports finance exchange to lure asset managers" into lending to football clubs ranked below investment grade, according to Alex Duff of BLOOMBERG. Ranson aims to turn London Sport Exchange Ltd. into a $750M platform to "match teams with hedge funds looking for fixed-income returns." Uckfield, England-based New Century Finance Ltd. Owner Richard Price said that such lending is currently a niche market for banks such as Close Brothers Group Plc. because of the "perceived risk." New Century has "arranged loans for teams including West Ham United" since '00. Ranson, who is "also seeking to broker finance in other sports" such as F1 and golf, said that he is creating a "new asset class" for an industry that is "isolated from fluctuations in other markets." He said that the exchange, scheduled to start Sunday on sportex.com, "might typically offer annual yields" of between 8% and 12%. Ranson: "If the stock market crashes, gold collapses and the price of oil declines, it doesn't affect the value of Cristiano Ronaldo." Ranson plans to "bundle future broadcast or sponsorship income" from Sky and adidas owed to "as many as a dozen clubs to make returns bigger for investors." Fund managers will bid in a "so-called Dutch auction, whereby the lowest bid wins, and can trade securities on the exchange." Ranson's equity partner in the exchange is Brian Phillpotts, a former Premier League commercial director (BLOOMBERG, 5/10).
