Caleb Williams stands out amid the early days of name, image and likeness compensation. The Heisman Trophy-winning USC quarterback and potential No. 1 pick in the upcoming NFL Draft has amassed an off-field marketing portfolio that would be the envy of most pro athletes, with sponsors including AT&T, Beats by Dre, Neutrogena, PlayStation and United Airlines.
Yet perhaps Williams’ most intriguing off-field play was not one when he received money, but rather quite the opposite: In July, Williams invested in women’s sports venture firm Monarch Collective’s $100 million debut fund.
Projected top NFL Draft pick Caleb Williams was part of Monarch Collective’s $100 million debut fund.getty images
It’s one of the first alternative investment deals to come out of the nascent NIL landscape, yet industry insiders already see a growing trend as high-income collegiate athletes begin looking for creative ways to deploy their newfound wealth. Those deals, which tend to be risky and illiquid, may only be suited for the select few highest earners, but sources see new opportunities for both the athletes and the companies in their portfolios.
Monarch co-founder and managing partner Jasmine Robinson said Williams had reached out through a mutual contact — one of his advisers knew Monarch co-founder Kara Nortman — and that her team was excited for him to join because of his authentic interest in women’s sports. It also helped that he provided a high-profile name that would only help drive further interest, and potential future investment, in the quickly growing sector.
“For us, it was about bringing visibility to the women’s sports space in general,” Robinson said. “The more people we have with that profile talking credibly about women’s sports as an investment opportunity, the more family offices and institutional investors and others will start looking into this space.”
That sort of strategic upside explains the growing demand for NIL athlete capital, despite the fact that even the highest-earning collegiate athletes and their seven-figure incomes are nowhere close to the salaries of top pros across the major leagues. And Williams isn’t alone in taking advantage of the opportunity.
In November, Alabama linebacker Dallas Turner, another likely first-round NFL draftee this April, invested alongside Marc Lasry’s Avenue Sports Fund and a long list of pro athletes — boxer Deontay Wilder, NFL wideout DeAndre Hopkins and soccer player Jozy Altidore, to name a few — in SailGP’s U.S. Team. Mike Buckley, CEO of that team, is hopeful that group in general, and Turner in particular, will play a key role in introducing sailing to new audiences.
“It’s huge, right? Just the juxtaposition between an active Alabama linebacker and the sport of sailing, those two worlds are about as far away as you can get,” Buckley said. He added that the deal was reasonably safe, so far as niche team investments go, since SailGP’s $10 million-per-year spending cap minimizes the red ink and ensures the team won’t soon need to look for additional funding that would dilute existing owners’ stakes.
Patricof Co is a New York-based investment firm that pools athlete capital to take stakes in larger private equity deals. It now has over 200 athlete clients including Joe Burrow, Travis Kelce and Dwyane Wade, and it opened its doors to NIL athletes beginning with Bryce Young, the former Alabama quarterback who now plays for the Carolina Panthers. The firm has five current collegiate athletes, including LSU gymnast Livvy Dunne and North Carolina women’s basketball standout Deja Kelly.
“A bunch of [NIL clients] have written checks, and it’s not the same checks that Trae Young or someone on a max contract is writing, but it’s material. Especially for them, where their net worth isn’t as high,” said Matt Siegel, who leads Patricof’s athlete advisory practice. “And it’s not some blind check into a fund. They’re investing directly into a company, and they know their 10 grand, 20 grand, whatever the number is, will be exponentially bigger because of the impact they can make on the deal.”
Siegel wouldn’t discuss details but said Dunne and Kelly are both joining Patricof’s next investment. He and others also noted that today’s NIL investors are simultaneously paving the way for future athletes while also accruing valuable firsthand financial experience before entering the pro sports ranks.
Aaron Ryan, who as president of NorthRock X oversees $1.2 billion in assets and has more than 100 financial advisory clients in the sports and entertainment industries, noted that alternative investment offers can provide a unique learning opportunity in conversations with NIL-earning athletes and their families.
“We really differentiate this notion of net worth versus a sort of path to desired liquidity, and if we’re operating within a budget, we’re setting up the right foundation and have anchored the values, now it gets really fun,” Ryan said. “Now it’s, let’s have you be part of the due diligence. We start with things like, who is the leadership of this opportunity? What’s their track record? And these are all really great and convenient opportunities for a financial education.”
That said, Ryan and other wealth advisers are quick to note that alternativeinvestments are a sensible strategy for only a small handful of high-earning NIL athletes, and even then, basic education around finances remains of paramount importance. Heather McPhie Watanabe, first vice president and global sports and entertainment director for The Parcell-Watanabe Group at Morgan Stanley, said the collegiate-level wealth advisory process typically focuses on the fundamentals.
“You’re starting with trying to help them understand the seemingly basic stuff: What are your cash-equivalent investment options? What’s your budget look like? What’s your cashflow?” stressed McPhie Watanabe, herself a former elite athlete who competed in moguls at the 2010 Vancouver and 2014 Sochi Games. “And then, ideally, you’re unpacking it and starting to talk about the basics of investing and taxes.”
The sentiment was echoed by fellow Morgan Stanley wealth adviser Jeffrey Kotalik, senior vice president and global sports and entertainment director at The Titan Group, who also noted that for all the attention NIL alternative investments may receive, their overall importance ultimately pales against the scale of new financial opportunities.
“There is no barrier to entry to now start the business of the rest of your life,” said Kotalik. “That is the win of NIL on the big scale, versus the minor ‘OK, this guy got $4 million and is going to triple it.’ The big item in NIL is everybody gets a chance to start their business life now. That’s new, and that’s real.”
Chris Smith writes a monthly column on finance news and trends. He can be reached at [email protected].
