Gerry Cardinale has spoken about his objectives with RedBird Capital and how he manages his assets such as AC Milan, admitting he has a hands-off approach when it comes to on-field matters.
Cardinale gave an interview to the Financial Times in which he spoke about his journey to this point, including working for Goldman Sachs until he left in 2012 and then realising how difficult it can be to raise capital when starting from scratch.
“At Goldman you pushed a button and $20bn would show up. When I started RedBird, I had no relationships with capital,” he said.
“It was basically an ‘oops’ moment like the Road Runner scene where the coyote goes off the cliff, looks down and says ‘Oh, shi**’. But the one thing I’ve always had is deal flow.”
Families and entrepreneurs I made money with and worked with, were the first to show up. And that gave me enough credibility. I think I raised $100mn from those groups.”
Now, Cardinale’s RedBird group have over $10bn of assets under management – according to the private equity group – and they have to date returned investors 2.5 times gross multiple of capital and 33 per cent gross internal rate of return, with a focus mainly on sports.
The report mentions how Cardinale spends at least 10 days a month travelling, flying to Europe and the Middle East before returning to his home in Florida to be with his family when he can.
He spends a lot of time during the day on calls with managers at portfolio companies and RedBird investors, while Milan executives bring ‘updates on issues ranging from a player’s new contract negotiations to talks with public officials about a new stadium’.
“We don’t select players for the Boston Red Sox, Liverpool, the New York Yankees or AC Milan; those decisions are left to the management of these assets who have the expertise and record in these areas,” Cardinale says.
“We don’t tell David Ellison what movies to make or not make at Skydance; we don’t tell Ben Affleck or Matt Damon what movies to make or not make at Artists Equity; and we don’t tell [basketball player] LeBron James and [business partner] Maverick Carter what projects to take on or not take on at The SpringHill Company.”
It was confirmed at the end of last season that Cardinale had taken the decision to sack Paolo Maldini and Ricky Massara. That created a media storm given he is a club icon, but reports then began to surface regarding why he made the call.
Moreover, club president Paolo Scaroni then all but confirmed that Maldini was fired because he was not comfortable with the idea of sharing ideas and power, and Cardinale touched on the subject more generally when speaking about the importance of ‘collegiality’ and ‘culture’.
“One of the benefits of spending 20 years at Goldman Sachs is that culture plays a critical role in everything we do as a firm. I have no tolerance for political behaviour or lack of collegiality.
“At RedBird, we have a culture of collegiality, collaboration, and over-communication. Nobody is off on their own, but I give people an entrepreneurial experience with room to run.
“I expect everybody to take initiative and have a mentality of building their own business, so that ultimately the sum of the parts will be greater than the whole.
“In any endeavour, it’s essential to wake up every day with a clear purpose and a sense of urgency. Simply maintaining your lifestyle as a former Goldman partner lacks legitimacy.
“There’s been little innovation in private equity for four decades, returns have compressed and yet there’s been no change to the constructs or the investment methodologies. We want to be a catalyst to help evolve the private equity paradigm towards the ‘new new thing’.”
