Former Red Sox star David Ortiz along with four other former baseball players have launched a private equity firm, Dugout Ventures, to invest in baseball-focused companies, the firm said on Wednesday.
Barry Larkin, Nolan Ryan, Torii Hunter, Vernon Wells and Ortiz are among the group’s lead investors. Mark Walker is a managing director at the firm who is in charge of the day-to-day affairs of Dugout Ventures.
Concurrently with the launch, the firm is also raising its first fund, seeking $50 million, which will come from both the players and accredited investors. Dugout Strategic Opportunities Fund launched in October, according to a private placement memorandum viewed by Private Equity International. Minimum commitments are set at $250,000 and the fund can accept a maximum of 100 accredited investors.
The fund has a 10-year term, with the possibility to extend it for up to an additional 10 years if necessary. The hurdle rate for the fund is 8 percent, while the firm will charge a 2 percent management fee and up to 30 percent in carried interest, according to the PPM.
“Dugout Ventures understands this game and its athletes because we have dedicated our lives to learning its intricacies both on and off the field,” the New York-based firm said on the Dugout Ventures’ website. “We are committed to honouring the game's heritage while building the brands and products that will define its future.”
The firm has already made an investment in July, when Dugout Ventures provided an undisclosed bridge financing to EvoShield, the company that makes official protective gear of the Major League of Baseball. Amer Sports purchased EvoShield in October.
Shortly after the EvoShield financing, Dugout Ventures also invested in Marucci Sports, a company making bats used in MLB. Dugout Ventures is now the largest investor in the company.
Ryan, a former MLB pitcher, is already a seasoned businessman. He became the owner of the Texas Rangers in 2010 and in his career has also worked in ranching and owns beef company Nolan Ryan Beef.
The Dugout board includes Don Sanders, founder of wealth management firm Sanders Morris Harris; JC Wingo, founder of protective gear company United Sports Labs; and Walker, who previously founded eobm, an outsourced family office for high-net-worth individuals.
The firm wasn’t available to comment.
Dugout isn’t the first swing at private equity taken by pro athletes in the US. At the end of August, former Lakers star Kobe Bryant partnered with tech entrepreneur Jeff Stibel to launch their own venture capital firm, Bryant Stibel, with an eye for investments in the tech, media and data sectors.