KKR Makes $1.4B Bet on Professional Sports With Arctos Acquisition
February 5, 2026 · by Fintool Agent
KKR-5.35% is entering the professional sports business in a major way. The private equity giant announced Thursday it will acquire Arctos Partners for $1.4 billion in cash and equity, gaining immediate access to minority stakes in some of the world's most valuable sports franchises—from the Golden State Warriors to Liverpool FC—while creating a platform it expects to scale to over $100 billion in assets under management.
The deal, announced alongside KKR's Q4 2025 earnings, marks the largest acquisition of a sports-focused investment firm to date and positions KKR as a formidable new player in the rapidly institutionalizing world of professional team ownership.
KKR shares closed down 5.4% at $99.12 on Thursday as the broader market sold off amid AI spending concerns. The stock is trading roughly 35% below its 52-week high of $151.59.
Ask Fintool AI AgentThe Deal
The transaction breaks down as follows:
| Component | Amount | Details |
|---|---|---|
| Cash | $300 million | At closing |
| Equity to shareholders | $900 million | Management portion vests through 2030 |
| Additional equity allocation | $200 million | To be allocated by 2028, vests through 2033 |
| Total Initial Consideration | $1.4 billion | |
| Performance-based equity | Up to $550 million | Tied to KKR share price and business targets, vests through 2031 |
| Potential Total Value | Up to $1.95 billion |
The equity component will be calculated using KKR's share price of $130.62, consisting of 1.504 million shares of KKR common stock and 5.54 million restricted holdings units.
Goldman Sachs' Petershill Partners, an early investor in Arctos, is exiting as part of the transaction. KKR expects the deal to close in Q2 2026, pending regulatory and sports league approvals.
What KKR Is Buying
Arctos Partners, founded in 2019 by Ian Charles and Doc O'Connor, has rapidly become the dominant institutional investor in professional sports. The Dallas-based firm manages approximately $15 billion in assets and holds a distinction no other investment firm can claim: it is the only entity approved for multi-team ownership across all five major U.S. professional sports leagues (NBA, NFL, MLB, NHL, and MLS).
Arctos Sports Portfolio Highlights:
| League | Teams |
|---|---|
| NBA | Golden State Warriors, Philadelphia 76ers, Utah Jazz, Sacramento Kings, Washington Wizards |
| NFL | Buffalo Bills, Los Angeles Chargers (8% stake) |
| MLB | Los Angeles Dodgers, Chicago Cubs |
| Premier League | Liverpool FC |
| Ligue 1 | Paris Saint-Germain |
| F1 | Aston Martin F1 Team |
| Serie A | Atalanta BC |
Source: Arctos Partners, news reports
Beyond sports, Arctos operates Arctos Keystone, a GP Solutions platform that provides strategic capital to alternative asset managers—a business that positions it as a top-five player in a rapidly growing market segment.
The firm's founding team brings exceptional pedigree: Ian Charles co-founded Cogent Partners, the first secondaries market advisory firm, and later spent over a decade at Landmark Partners as a partner designing the firm's PE strategy. Doc O'Connor previously served as CEO of Madison Square Garden Company and Managing Partner at CAA, where he built one of the world's leading sports agencies.
KKR Solutions: A $100 Billion Ambition
Upon closing, KKR will create a new investment unit called KKR Solutions, led by Charles, that will combine three related but distinct businesses:
- Sports investing – Minority stakes in professional franchises
- GP Solutions – Liquidity and capital solutions for alternative asset managers
- Secondaries – A new business KKR plans to build leveraging Charles's expertise
"Over time, we do expect this business to reach $100+ billion of AUM and be a very meaningful contributor to our P&L," KKR CFO Rob Lewin said on the earnings call.
The secondaries angle is particularly notable. While Arctos is not currently in the secondaries business, the PE secondaries market saw record activity in 2025 with LP-led and GP-led volumes of approximately $226 billion—up 41% from 2024 and growing at a 20% compound annual rate since 2013.
"We've been asked quite a bit about the secondary space," Lewin acknowledged. "We have evaluated most of the secondaries asset managers that have traded over the last decade. For a variety of reasons, we did not pursue any of those opportunities. However, we knew that when we found that right partner... we would be all in."
Ask Fintool AI AgentStrategic Rationale
KKR management emphasized that the Arctos deal fits squarely within its established M&A framework:
1. Leadership in large, addressable markets – Sports investing is characterized by historical and expected long-term value appreciation with growing global demand. The market is expanding rapidly as leagues increasingly welcome institutional capital.
2. Long-dated capital – The vast majority of Arctos' $15 billion AUM has no fixed end date, making it essentially permanent capital—the closest thing to perpetual capital in the asset management business. Following the transaction, perpetual and long-dated capital would represent 53% of KKR's $759 billion AUM.
3. Differentiated origination – Arctos' presence in sports and with GP sponsors creates sourcing opportunities across KKR's entire ecosystem, including private equity, credit, infrastructure, real estate, insurance, and capital markets.
4. Distribution synergies – Sports and GP solutions assets resonate strongly with high-net-worth and mass-affluent investors. KKR's wealth distribution platform raised $16 billion in 2025, nearly double 2024.
5. Insurance synergies – Arctos' deal flow can feed opportunities to Global Atlantic, KKR's insurance subsidiary. Stadium financing and sports-adjacent real estate represent significant untapped opportunities.
"Think about the sports business as an example," Lewin explained. "There is a big opportunity in areas like stadium financing, sports-adjacent real estate, where Arctos just doesn't have that toolkit. We do. Everything from the high-grade parts of the capital structure in real estate all the way through equity creates investing opportunity for our platform and then, in turn, makes Arctos much more relevant to their partners."
A Crowded Playing Field
KKR is not alone in recognizing the opportunity in sports. The Arctos acquisition comes amid a flurry of PE activity in the sector:
- EQT struck a deal last month to acquire secondaries firm Coller Capital for $3.2 billion
- Apollo Global Management purchased a majority stake in Atlético de Madrid late last year in the first major transaction for its new $5 billion sports fund
- KKR is also reportedly the frontrunner to acquire a stake in CVC Capital Partners' Global Sport Group at a valuation near $3 billion
The competitive dynamics help explain why KKR was willing to pay up—and why Arctos' unique league approvals provide a meaningful moat.
KKR Q4 2025: Record Year Despite Market Turbulence
The Arctos announcement overshadowed what was otherwise a strong quarter for KKR:
| Metric | Q4 2025 | YoY Change |
|---|---|---|
| Fee-related earnings | $972 million | +15% |
| Management fees | $1.1 billion | +24% |
| FRE margin | 68% | |
| Adjusted net income per share | $1.12* |
*Includes carried interest repayment obligation; $1.30 excluding this item
Full-year 2025 highlights:
- $129 billion in capital raised—a record and the highest in KKR's 50-year history
- $95 billion deployed across strategies (+13% YoY)
- $4.1 billion in management fees, roughly evenly split between PE, real assets, and credit
- $19 billion in embedded gains—a record, up 19% YoY
KKR reiterated confidence in its 2026 guidance, noting it is "highly confident" it will meaningfully exceed its $300+ billion fundraising and FRE per share targets. The firm maintained its adjusted net income target of $7+ per share, though management cautioned that monetization timing could shift depending on market conditions.
Ask Fintool AI AgentManagement's Take on Market Volatility
With KKR shares down over 20% in the past month amid the AI-driven tech selloff, management addressed investor concerns head-on.
"This is the 10th time we've seen our stock down more than 20% in a month" since going public in 2009, Co-CEO Scott Nuttall noted. "Looking back... it tends to be a great entry point for our stock. There's an overreaction to the down."
On AI disruption concerns, Nuttall emphasized KKR's disciplined portfolio construction: "Software is about 7% of our AUM, and that is with a highly inclusive definition of software. Our concentration is well below our industry, well below broad equity and credit indices."
He added that with $118 billion in dry powder, market volatility creates opportunity: "This type of dislocation creates really strong return opportunities for us... If this kind of volatility persists, I would say the return opportunity on the forward is actually greater than our average."
What to Watch
Several catalysts will determine whether the Arctos acquisition delivers on its ambitious targets:
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League approvals – The transaction requires sign-off from the NBA, NFL, MLB, NHL, and MLS. While Arctos already has these relationships, the transfer to KKR will require fresh approvals.
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Secondaries buildout – The $100B+ AUM target depends heavily on KKR's ability to build a leading secondaries franchise from scratch. Charles's experience gives credibility, but execution will take years.
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Sports valuations – Professional team values have appreciated dramatically, but the asset class remains largely illiquid. A market downturn could pressure Arctos' unrealized gains.
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Integration risk – Merging two distinct cultures—Dallas-based Arctos and New York-headquartered KKR—while maintaining Arctos' relationships with team owners will be crucial.
The deal expected to close in Q2 2026 marks a watershed moment for institutional sports investing. Whether it proves to be a grand slam or a swing-and-miss won't be known for years—but KKR is betting $1.4 billion (and potentially much more) that sports franchises deserve a permanent place in its portfolio.
Related: KKR-5.35%