Who is behind the American fund Sixth Street, the real ‘signing’ of Real Madrid?

The disappointment of the has clouded the last date marked in red on the Madrid calendar: Thursday, May 19, 2022. That day the white club’s millionaire alliance with two new partners was sealed: the American fund and Legends, the firm specialized in managing venues sports, where the American private equity owns 51% of the capital. Alan Waxman, CEO of Sixth Street, and Florentino Pérez, president of Real Madrid, signed a contract to operate the new stadium with the aim of turning the renovated Bernabéu into a world benchmark for leisure and entertainment.

Members of the white club and fans wonder who is the American fund that will have the right to participate in the exploitation of the pharaonic coliseum for 20 years. According to the fine print of the final contract, Sixth Street will take up to 30% of the revenue from the Bernabéu, -except the sale of season tickets-, and Real Madrid will take the remaining 70%. Although it is still early to make numbers, the forecast is that the new stadium generates between 350 and 450 million euros per year.

The US fund, which manages 60,000 million euros, bought five coastal hotels in Spain last year for 85 million

Sixth Street is headquartered in San Francisco and operates from nine offices around the world: New York, London, Hong Kong, Dallas, Houston, Luxembourg, Melbourne and Boston. It has 60,000 million euros in assets under management and extensive experience in investments in sports and infrastructure. The American fund owns 20% of the US basketball team San Antonio Spurs, one of the most successful in the NBA. It is also a shareholder of the vacation rental firm Airbnb, where it invested 900 million euros between debt and capital in 2020 together with Silver Lake to help the company face the pandemic and boost its stock market balance on the Nasdaq. Also included in its portfolio are Spotify, the streaming music application -sponsor of FC Barcelona- and the oncology company Caris Life Sciences, among others.

Sixth Street was born in 2009 as the credit arm of the venture capital giant. Its origin is in the private credit division of US private equity. A strategic association that lasted until 2020. That year, both firms decided to separate their paths in independent businesses, although TPG maintains a minority stake in Sixth Street. With more than 400 staff members, including more than 180 investment professionals around the world, the fund is headed by Alan Waxman, CEO and former partner of Goldman Sachs.

Real estate and hotels

In 2021, Sixth Street burst onto the Spanish hotel market with the acquisition of five holiday hotels for 85 million euros (between purchase and renovation) in the towns of Benidorm (Alicante), Roquetas (Almería), Lloret de Mar (Girona ) and Salou (Tarragona). Specifically, the Hotels Roquetas, Palm Beach and Don Jorge Apartments in Benidorm, OhTels Playa Oro in Salou, and Santa Rosa in Lloret de Mar. The fund invests, together with the main international operators, in prime tourism destinations world. Its European real estate team, based in London, partners with real estate managers and institutional investors to acquire, finance their real estate investment and management expertise.

In 2021, Sixth Street acquired 51% of the premium experiences company Legends -created in 2008 by the promoters of the New York Yankees and the Dallas Cowboys- in an operation valued at 1,300 million dollars. A strategic alliance that has allowed both American firms to go hand in hand to seal the long-term agreement with the white club and exploit the Madrid venue as a space for events and leisure.

The premium experiences company Legends, specialized in organizing sporting events and shows, will contribute its experience and knowledge in the management of large stadiums and leisure centers. The objective is clear: to optimize the management of the Santiago Bernabéu and turn the new stadium into a source of income, for which the white club has allied itself with Sixth Street and its investee company, Legends, with a large cache and agreements with teams such as Manchester City, Liverpool or Rome, in addition to collaborating with Wimbledom, or with the 2028 Olympic Games in Los Angeles.

A strategic alliance with which Real Madrid hopes to begin to make profitable the great integral reform of the Bernabéu, whose cost amounts to 800 million euros. Without a doubt, Sixth Street is the true signing of the white club for the next 20 years.