FEATURED STORY
The Real Reason Why KKR Bought Arctos
Photo: Arctos founders Doc O’Conner and Ian Charles pictured left to right.
“Sports is officially an institutional asset class.”
Anyone who works around sports deals has heard that line in a thousand different ways: in meetings, on panels, and in almost every write-up that involves any sports transaction. We’re guilty of it too - it’s our favorite way of explaining to friends outside of the industry why there’s so much money to be made.
But it’s overly reductive. In many cases, it’s a disservice to the rationale behind a strategic business move in sports, glossing over the underlying motives behind major transactions.
Which brings us to last week’s headline: KKR (NYSE: KKR) - one of the largest private equity funds - acquires the pioneer of sports private equity, Arctos Partners, for $1.4B.
The consensus takeaway has been predictable:
“Megafunds are here, sports is the asset class now, funds not investing are missing out.”
But that’s just 20% of the story.
So for this week, we’re breaking down what KKR is actually buying with Arctos, why this deal is best understood as a $100B platform opportunity, and how KKR’s playbook around sports will look very different from the rest of the megafund crowd.
KKR-Arctos Deal Breakdown
Before we jump in, let’s pin down what actually happened because the entire thesis is buried in the structure:
Price: $1.4B valuation funded with $300M in cash and $1.1B in KKR stock.
Earnouts: Arctos can earn up to $550M more in performance-based equity tied to KKR’s share price
Timing: Expected to close in Q2 2026, contingent on approvals from the five major U.S. leagues where Arctos has ownership positions.
New Platform: Arctos gets folded into KKR Solutions - a new vertical combining sports investing + GP Solutions + secondaries, led by Arctos co-founder Ian Charles.
Target Scale: KKR Solutions is aiming for $100B+ in AUM over time.
The devil is always in the details. Throughout KKR’s earnings call, investor presentations, and dialogue around the transaction, there wasn’t a substantial emphasis on “gaining access to Arctos’s minority ownership in sports teams.”
It’s much more nuanced.
These details highlighted in our quick glossary are the tell:
GP Solutions: Structured liquidity and financing for private equity firms - capital that helps GPs handle things like fundraises, partner transitions, GP commit financing, and platform expansion without forcing asset sales (Note: Proskauer Rose has a terrific breakdown here).
Secondaries: Buying and selling existing positions in private funds to cash out early or invest in a more matured portfolio.
Ian Charles: Arctos co-founder, managing partner, and the driving force of launching the fund’s GP Solutions “Keystone”. Before Arctos, he was a legendary secondaries investor (Cogent Partners, Landmark Partners), the exact person you would want leading a fund like KKR Solutions.
While Arctos is inherently a sports fund, it’s their investment playbook and personnel that KKR sees as a potential $100B asset business in the making.
Why Sports Investing Cracked the Secondaries Playbook
KKR had been searching for a specialized secondaries platform for a long time. The market is absolutely crushing: secondaries just hit a record $226B in transaction value, up 41% year-over-year, as LPs hunt for liquidity in longer exit cycles, investors look for ways to smooth the J-curve, and funds growing reliant on continuation funds (we’ve linked articles that break down some of the terms).
So KKR decided to buy Arctos - which is ironic, because Arctos isn’t a “secondaries fund.”
But the more you think about it, the more you realize Arctos may have built the world’s first sports version of a secondaries business.
Here’s the context behind it. Before Arctos, Ian Charles:
Helped start Cogent Partners in 2001, where they helped pensions and endowments sell stakes in private funds when they needed liquidity.
Joined Landmark Partners in 2006, structuring liquidity for investors by buying stakes at a discount.
Worked with KKR on one of the industry’s first structured secondary transactions which helped launch the fund’s healthcare and tech growth franchise.
When Arctos launched in 2019, co-founders Ian Charles and Doc O’Conner saw something similar in sports: sports team ownership looks a lot like private equity funds. It’s highly illiquid, structurally complex, and ownership stakes can stay locked up for decades. The difference is the LPs are the billionaire owners and the asset is a franchise.
Arctos could provide liquidity to team owners while staying positioned as a long-term strategic partner.
Naturally, they scaled that same thesis beyond sports through its Keystone Fund - their GP Solutions business, with a target raise of $4B and described as a “top player in GP solutions” by KKR CFO Robert Lewin.
That’s why KKR bought. With Ian Charles at the helm, they have conviction in scaling their new secondaries business cross industries into a $100B platform.
But don’t fret, sports will still be a crucial part of KKR Solutions.
Sports is a Horizontal Industry for Finance
As a former investment banker (Suraj), I love mapping the potential synergies between two companies. And in sports, there’s a lot between KKR and Arctos. On KKR’s Q4 2025 earnings call last week, Robert Lewin laid out where KKR’s other platforms (real estate, credit, insurance) can plug into sports:
“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, real estate, all the way through equity.”
Outside of secondaries, KKR’s “Acquisition of Arctos” investor presentation breaks this down division by division:
Source: KKR’s “Acquisition of Arctos” investor presentation.
KKR’s real estate portfolio sits on a $258B total market footprint that can spearhead mixed-use development around venues, or help finance it through credit and insurance. Arctos’s relationships with team owners and sports investors become a unique deal flow engine for all of their platforms, including private wealth.
Arctos plugs into KKR’s financing flywheel really well.
But wouldn’t it have for every other megafund?
Why Every Institutional Investment in Sports is Strategically Different
This deal is bespoke to KKR - and it likely doesn’t work as cleanly if another megafund acquires Arctos. As we’ve talked through, KKR needs inroads to build a solutions / secondaries business, and Arctos’s sports business just happens to be an unusually powerful product for that.
Additionally, passive and long-term minority stakes in teams also fits KKR’s broader shift toward long-duration capital. 53% of their $759B AUM is now perpetual capital with no fixed-end date.
This asset wouldn’t have been as enticing for a firm like Apollo, which launched Apollo Sports Capital and is ready to deploy $6B into sports.
An Apollo x Arctos pairing would feel like mixing oil and water for a few reasons:
Different Strategy: Arctos and KKR lean toward minority equity and liquidity solutions. Apollo leans heavily towards credit, where low loan-to-value ratios in franchises create room for private credit and hybrid structures (per their December 2025 report).
Active vs. Passive: Apollo is more opportunistic and willing to take controlling positions (like their $2.9B acquisition of Atletico Madrid). Arctos is built around passive stakes and staying away from operational control.
Build vs. Buy: Apollo had already deployed $17B across sports, media rights, and stadium financing before they launched ASC. KKR sees Arctos as a more seamless path to sports investing.
Which brings us back to our original point.
“Sports is now an institutional asset class” can’t be the headline takeaway anymore.
Sports investing is growing more sophisticated in real time - each firm has a distinct investment strategy, built around different moats, financial products, and target assets.
And that’s great for our industry.
It’s the type of nuance that showcases what real maturity looks like in this asset class.