In December, two months after securing a landmark $200 million investment from the Texas Permanent School Fund, the founding partners of Velocity Capital Management were still aglow sitting in their headquarters overlooking Manhattan’s Columbus Circle. Velocity had already acquired stakes in five companies, and the new institutional backing — among the largest on record for a sports investment fund — should enable it to be a major player for years to come.
What’s more, Velocity isn’t done raising yet.
The firm is targeting a $500 million debut fund, which it expects to close toward the end of 2025. It’s just over halfway to that goal, now managing some $256 million, according to a regulatory filing this month. And Velocity has already deployed around $125 million across sports consultancy Elevate, the X Games, media measurement firm Videocites, auto racing holding company Parella Motorsports and children’s experiential business Camp NYC. Velocity declined to comment on its fundraising efforts.
The sports investment firm was launched in late 2021 by former Harris Blitzer Sports & Entertainment chief investment officer David Abrams and prior Sportradar U.S. CEO Arne Rees. On that blustery December day, Robert Borden, Texas PSF’s CEO and chief investment officer, recalled how he first got to know Abrams more than 15 years ago.
Abrams was a partner at Apollo and working with Borden, then overseeing investments for the South Carolina Retirement System, to put together $500 million to launch Athene, which acquired annuities on the cheap from insurance companies staggering out of the recession.
That firm was valued at $11 billion when it merged with Apollo in 2022.
“These are the kinds of things that can come out of a strategic partnership if you’re willing to sit side by side with partners with fungible capital and be there when the opportunities present themselves,” Borden explained.
He and Velocity are putting that theory to the test once more: The $56 billion Texas PSF didn’t only invest $200 million in Velocity’s debut fund, but it also acquired an ownership stake in the business.
Abrams and Rees had already assembled some powerhouse backers, with prior investments from David Blitzer’s Bolt Ventures, concessionaire Delaware North, soccer marketing agency Remington Ellis and investment adviser Signify Wealth, as well as the Hartono family, the wealthiest in Indonesia, according to Forbes.
But the Texas PSF deal is something else altogether.
“It’s the first time you’ve ever seen an institutional allocator of this significance invest to build a platform in this space,” Abrams said. “We basically are set up now to do everything: private equity, credit, real estate. And the biggest differentiator is that there are plenty of opportunities that don’t fit in any of those aforementioned buckets. We can do those.”
Beyond his prior work with Abrams, Borden said he was impressed by the broader Velocity team and its early portfolio. All that was missing was a sizable chunk of cash.
“Having to go around and raise capital is a big distraction, and every hour you spend doing that is an hour that you’re not feeding the value creation in these companies,” Borden said. “[We’re] basically freeing this team to focus on what’s most important, which is creating enterprise value and looking for other acquisitions that are priced right and that are complementary.”
In fact, opportunities for cross-pollination within Velocity’s portfolio have been a key focus.
Elevate now sells premium hospitality and tickets for some of Parella’s top races, and it led the search process to hire new Parella CEO Lee Giannone. Videocites — for which Velocity led a $10 million Series B with participation from NBA Equity — is measuring media reach for Parella and the X Games, and it has a deal in place with Elevate to provide social media data on brands and rights holders.
Velocity plans to invest between $50 million and $100 million across the life of each of its investments, a total that includes support for acquisitions. The firm’s portfolio companies made six acquisitions last year, including Elevate’s expansion into executive search and Parella’s acquisition of race series International GT. Further dealmaking is likely, with Borden noting that Parella could expand into car auctions, while Abrams suggested the X Games offer an opportunity to roll up further action sports properties.
Whether a control owner, as with Parella, or minority investor, Velocity’s leadership hopes that its deep sports operating experience will better enable the firm’s growth-stage portfolio companies to reach significant profitability and nine-figure revenues.
“We’re not here to be just passive investors in underlying asset growth,” Rees said. “We like the underlying asset growth … but we’re definitely finding a sweet spot where, especially in this growth phase, we can be very helpful to these companies.”
Velocity’s X Games investment was made alongside control owner MSP Sports Capital (Rees was previously a partner with MSP). Jeff Moorad, MSP’s CEO, said Abrams and Velocity have been helpful as the action sports platform prepares to pivot to a team league in 2026. “There are a number of folks who view this as a labor of love and not just a financial investment,” Moorad said.
Looking ahead, Rees, the former Sportradar exec, said Velocity is closely eyeing the sports gambling sector. “We’ll probably do a deal in that space in the next 12 months,” he said, pointing specifically to companies that are critical to the “technology value chain” that sportsbooks rely on.
More generally, Abrams expects the coming months and years will offer plenty of new opportunities, especially as investors who did deals at sky-high valuations start scrambling for a way out.
“Look at all the money that got thrown around at the beginning of COVID. We’re coming up on five years in, and there have not been that many exits,” Abrams said. “You’re not going public. Forget about the whole SPAC thing. And there has not been that much strategic M&A for various reasons. So if you’re an investor in these businesses, how are you going to get liquidity? That’s an area of focus for us.”
Chris Smith can be reached at crsmith@sportsbusinessjournal.com.
