Formula 1 teams have historically been financial death traps for institutional investors. Of the over 170 teams that have competed since 1950, more than 150 of those have gone out of business chasing performance in an arms race with no spending limits.
A team’s financial model was simple: throw money at the problem, and if you couldn’t keep up, you disappeared.
Things changed in 2021, when F1 introduced a cost cap that coincided with revenues exploding, thanks mainly to Liberty Media’s overhaul of the sport’s commercial strategy, which birthed the likes of Drive to Survive and lucrative media rights deals.
Since then, team valuations have skyrocketed and seven out of ten teams (from 2025) are now profitable. More on why in the article below.
As a result, private equity firms are paying attention.
What is Private Equity?
For the uninitiated, PE firms pool capital from institutions and wealthy individuals to acquire significant stakes in companies, usually with the goal of improving operations, accelerating growth, and exiting at a higher valuation within a set time frame (often 5-10 years).
Their playbook tends to favor businesses with predictable cash flows and clear opportunities to professionalize, scale, or optimize operations.
PE is often spoken about as a monolith but in practice, it isn’t. Sometimes it’s constructive. Sometimes it’s problematic. It’s often unsexy.
Sports has only recently emerged as a viable asset class for PE, largely due to the professionalization and financial stabilization of leagues and teams.
Some early credit goes to Jerry Jones, whose purchase of the Dallas Cowboys in 1989 marked one of the first signals that sports could be a worthy investment.
2006 brought what is considered the first official PE investment in sports, when three American funds bought the majority of soccer team Paris Saint-Germain.
Over the past two decades, sports franchises have consistently outperformed the S&P 500. One thing PE firms love to promise their investors? They beat the market.
Private Equity in Formula 1
PE’s interest in F1 is not entirely new, though the focus has shifted.
Before Liberty Media, private equity firm CVC owned the sport. CVC bought a 63% stake in F1 for $2 billion in 2006. By loading the sport with debt, CVC extracted $4 billion through dividends and partial stake sales before selling its remaining 35% stake to Liberty in 2017, valuing F1 at $8 billion, a massive return.
But CVC owned the league itself; recent investment in team ownership stakes represents a fundamentally different proposition. PE investment in F1 teams began in 2020, whenDorilton Capital bought 100% of struggling Williams for $200 million.
Today, Williams is valued at $2.1billion. Dorilton co-founder Matthew Savage said: “We wouldn’t have invested if not for the cost cap. There’s just no way we could have caught up otherwise. What it did was it turned the sport into a business competition.”
Dorilton has indicated it has no intention of selling, viewing Williams as a long-term strategic asset rather than a short-term flip. This is a trend in sports PE we’re beginning to see more of – buy and hold. Savage thinks of Williams as “10, 20, 25, 30-year project potential.”
Dorilton has indicated it has no intention of selling, viewing Williams as a long-term strategic asset rather than a short-term flip.
That same year, MSP Sports Capital paid $250 million for a 15% stake in McLaren. Five years later, MSP exited at an almost $5 billion valuation – a tenfold return and the biggest sports team exit ever for an institutional fund.
In 2023, Arctos Partners, a sports-focused fund, invested in Aston Martin, followed by HPS Investment Partners and Accel. The percent stakes and deal sizes are undisclosed. The team is now valued at $3 billion. KKR, one of the most well known private equity firms, agreed last week to purchase Arctos Partners, reinforcing sports as a durable, institution-grade asset class.
Similarly, Alpine F1 Team attracted RedBird Capital Partners, Otro Capital, and Maximum Effort Investments, backed by Wrexham AFC owners Ryan Reynolds and Rob McElhenney, plus NFL stars Patrick Mahomes and Travis Kelce.
The group paid €200 million in 2023 for a 24% stake at a team valuation of roughly $900 million. As of 2025, the team is valued at $2.1 billion. Reports suggest the consortium may be exploring an exit.
Not every PE firm is getting involved through buying team equity. Carlyle Group signed as Red Bull Racing’s exclusive investment management partner in 2025, paying for branding and hospitality access rather than a stake. The advantage? Using F1’s global reach to attract clients and expand their market.
Now that PE firms have held F1 assets for over five years, we’re starting to see divergent strategies play out.
Will others sell or continue to hold?
Both Parties Benefit?
Obviously, investors and teams alike love growth.
F1 teams need capital for facilities, technology, and personnel. PE firms seek assets that offer both growth potential and stability. But the partnership thrives in more nuanced ways as well.
For PE firms, two key advantages of F1 stand out:
- No league-wide restrictions. The Big Four U.S. leagues all have PE restrictions. The NFL allows only a 10% stake by a single PE firm, with total PE ownership capped at 20%, mandatory sale after six years, and no voting rights. The MLB, NBA, and NHL are slightly more permissive but cap total PE ownership at 30%.
- An anti-dilution fee of $400+ million for any new team wishing to enter the championship. This fee solidifies the value of the current team slots by creating artificial scarcity and a high barrier to entry. This structure is highly attractive to PE, as it guarantees the asset’s long-term appreciation.
For F1 teams, PE firms sometimes give the one thing that’s increasingly hard to find: peace.
Sports valuations expert Kurt Badenhausen of Sportico said: “I’m a full proponent of teams opening up to PE. It’s passive investment where you’re not going to be a squeaky wheel LP investor calling up Toto (Wolff) saying: ‘We’ve got to do this, we’ve got to do that.’ That is what goes through billionaires’ heads: do I need to bring in a limited partner that’s going to make my life difficult?”
Every investor varies, but this hands-off approach is particularly valuable in F1, where technical expertise and racing heritage matter as much as business acumen. Team principals and executives retain full operational control while PE partners provide capital and benefit from appreciation. The arrangement allows firms to capture upside from F1’s growth trajectory without needing deep motorsport expertise.
For smaller teams, the advantages extend beyond capital. Established PE firms bring institutional credibility that unlocks additional commercial opportunities. Under Dorilton Capital’s ownership, Williams expanded its partnership portfolio and improved its commercial infrastructure.
Alpine’s collaboration with RedBird Capital, which brings experience from other sports properties, provides access to broader networks valuable for sponsorships, media rights, and technical partnerships.
Read more from from authors Tiggy Valen and Will Colahan on their Substacks
