Dynasty Financial Partners CEO Shirl Penney believes his RIA support firm’s investment bank is well-positioned to be part of private equity’s growing presence in sports team ownership.

“I don’t know if it’s the name Dynasty that people can relate to from a sports perspective, or the fact that we have such a strong presence already in that space. I think it positions us well if and when we might get a seat at the table,” Penney said in response to an InvestmentNews question on sports investing. In addition to Dynasty’s connections, Penney himself owns a horse racing team, Team Penney Racing, which he and his wife Marry Ann manage. Team Penney currently has a stable of about 20 racehorses. 

At last week’s Schwab IMPACT conference in Denver, Penney told InvestmentNews that Dynasty Financial Partners supported the bid led by former Yankees slugger Alex Rodriguez and Jennifer Lopez to buy the New York Mets in 2020. They lost to hedge fund billionaire Steve Cohen, who spent an MLB record $2.4 billion to buy the Mets.

“We actually helped a group try to buy the Mets when [Steve] Cohen bought them,” said Penney, later clarifying Dynasty worked with Rodriguez and Lopez. ESPN reported in 2020 that Jim Cantelupe, co-founder of the $23 billion RIA Summit Trail Advisors, organized the group led by A-Rod and J-Lo, which also included celebrities such as NFL star Travis Kelce.

Some of the most active private equity investors who are taking minority stakes in teams across major sports leagues: 

The NBA’s Los Angeles Lakers were purchased earlier this year for a record-breaking $10 billion by Guggenheim Partners CEO Mark Walters, whose backers include the Abu Dhabi sovereign wealth fund Mubadala Capital.

“One of the challenges that the leagues have to solve for is liquidity for owners, given how so many of these assets have appreciated,” Penney said. “So figuring creative ways to get professional investors to come in for minority stakes, I think, is something that you’ll probably continue to see across the different pro sports.”

Dynasty’s investment bank looks to purchase up to 20% equity in transactions, Penney said. The investment bank recently partnered with Diamond Consultants to provide capital for large breakaway advisor teams looking to go independent, including the $129 billion OpenArc team that departed Merrill Lynch with Dynasty’s backing in September. 

“We pretty quickly in the last three years or so have built what I think is the most active investment bank in RIA space, run by Sam Anderson and Harris Baltch,” Penney said. “[Also] we’ve seen tremendous growth in our alternative platform, as we moved up to 15%, 20% type allocations to the alts. It’s really opened up I think a better return profile for a lot of our clients.”

Across the roughly $125 billion in client assets served by Dynasty, Penney estimated that about $5 billion is tied into managing wealth for athletes. He mentioned Dynasty’s athlete wealth clients and sponsors include NBA icons Steph Curry, Chris Paul and Devin Booker, as well as young MLB stars Julio Rodriguez and Bobby Witt Jr.

Several of Dynasty’s athlete partners can be traced back to the firm’s deal signed in 2013 with sports agency Octagon. The continued industry collision of sports and wealth included this week’s move from Goldman Sachs to buy talent agency Excel Sports Management, which reps clients such as Tiger Woods, Caitlin Clark, Nikola Jokić  and Derek Jeter. 

While at Schwab IMPACT in Denver, Penney received a phone call from his friend and client Gary Sheffield, the former MLB star who resides in the Tampa area where Dynasty is based. 

“He’s invited me to play golf with he and Michael Jordan. I know what he wants,” Penney said as his phone buzzed from Sheffield’s call.  Is the billionaire NBA legend a Dynasty client? 

“Not yet, give me some time,” Penney said of Jordan. 

Who knows what can happen on the golf course.