POLITICS & INSTITUTIONS - ECONOMY

Football: Managing athlete wealth, a market for Luxembourg



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It was Yves Creutz's father, Marcel, who launched the athlete wealth management side of the business. Photo: Foveart 

What started as a passion project--managing athlete wealth--now accounts for around 10% of clients at wealth management office Creutz & Partners, with the company following some its clients on the Euros pitches this month. 

“Let’s say that we watch television a lot, yes,” says Yves Creutz, managing director of wealth management company Creutz & Partners. Some of the firm’s clients are currently working on the pitch. “We'll win the Euro regardless of the name of the final winner,” Creutz says.

Rumour has it in Luxembourg that you are one of the most specialised asset managers in the field of top athletes. What does this represent in terms of customers?

Yves Creutz: Among our many clients, 10% are top athletes. Some are active in their first career, the one that takes place on the pitch. Others in their second, post-sport. We started out by taking care of footballers. But we are also now taking our first steps in cycling, basketball and tennis.

Why and how do you specialise in a field like this?

With us, it happened out of passion. The one that my father, our founder Marcel Creutz, dedicated to football and the German club Aachen. At one time he was even a member of the board of directors of Alemannia Aachen and experienced accession to the first Bundesliga in the 2000s.

My father, who had founded one of the first wealth management departments when he worked for Deutsche Bank in Aachen in the 1980s, thought it might be interesting to manage the assets of some footballers.

Do you manage a top athlete like any other client?

Yes and no. We obviously serve all of our clients with the same dedication: whether they are athletes, family entrepreneurs, art collectors, wealthy families or young investors. But there are some differences. The first is necessarily linked to the shortness of the career of a top athlete. For a footballer, we usually talk about 10 to 12 years. And at the end of it begins a second career, which will be much longer. A high-level athlete is therefore in a greater hurry to build up sufficient assets to live in the long term. We are not their agent; we do not take care of their commitments on the ground. But we help them save and build their wealth over the long term.

For our part, we have a family office-type approach, we take care of the athlete's needs in 360 degrees. And at this level, we can separate the athletes practicing a collective discipline from those exercising an "independent" sport such as tennis, golf... The support to be given to them is not the same. One statistic says that a person with €10m in wealth will live, on average, during their lifetime in three different jurisdictions. This is even truer for a footballer who is established where his club plays and may have to move internationally as his career progresses. But in a case like this, you need experts on your side who make your international life easier. This is our role.

So is the situation different for a tennis player, a golfer or a boxer?

Yes. Because they have different organisations, but also sources of income that can come from all over the world, depending on their results. If I take the example of a tennis player who participates in the Australian Open, Roland Garros and the US Open, she will receive her prize money from Australia, France and the US. She will therefore need tax expertise capable of adapting to her sporting background, while not forgetting that by moving around the world, she may not be able to stay 50% of the time in her place of residence. She will therefore clearly need specific support which will be different from that of a professional footballer.

What kinds of products do you offer a top footballer?

We don't have products to offer, but solutions that can be adapted to the specific needs of each of our athletes. The first thing we do when an athlete joins us is a fortune diagnosis. And this, depends on his assets, his ambitions, the direction he wants to take or when he plans to stop his first sports career. This gives us an internal knowledge of the current and future situation of the athlete. And on the strength of this personal observation, we then take care of carrying out our projects as well as possible, while calling on additional experts if necessary.

But you must have one or the other specialty?

We are long-term blue-chip investors. We therefore invest in solid companies with large capitalisation on a global level, focused on markets such as consumer (Nestlé, Unilever, etc.), luxury goods (the Richemont group, LVMH, etc.) or the pharmaceutical sector (Pfizer or Novartis). On the other hand, we do not invest in transport companies and generally avoid investing in companies which are above all dominated by cost competitiveness. It is important that we can understand the business model of the companies we choose. So, we have a long-term conservative approach.

Do the athletes who employ you know in which investments their assets are used?

Of course. It is even one of our strengths since the blue-chip companies in which we invest are generally known to everyone. These include Nike, Kellogg’s, Adidas, Microsoft, Apple, Starbucks...

A 2012 study by the German firm Schips Finanz found that at the time, 50% of footballers went bankrupt after the end of their sports career. It is starting to date a little, but the number is striking. Based on your experience, how has the situation evolved since then?

Wages have increased in an inflationary manner since 2012 in football. The situation is therefore perhaps less [striking] today... If I look at how things are going with our clients, I notice that they are very careful with their holdings. The 'hothead' style that one could find at the time, ten years ago, is much less present. At the same time, we're here to help them save. As a result, those who tend to throw money down the drain aren’t very compatible with what we do. Rather, we try to stimulate the reflexes that can avoid these bankruptcies... Those who haven’t thought about all this before the end of their first career sometimes take a tumble.

You were talking about more caution. Are players better supported or advised today?

No. They often remain badly surrounded. As soon as they make a good living, they find a lot of friends and their families tend to grow… Everyone asks them for something. It makes them suspicious. And we also notice that they are often happy to find a partner, whether it is us or a competitor, in whom they can have trust.

Are you generally approached directly by athletes or rather by those who advise them?

In principle, it is the athletes who come to see us. Often, however, they were referred by other colleagues. Word of mouth brings customers. In general, when an athlete comes to us, we keep them for the long term, not to say forever.

And do you have many customers present during the Euro football which is currently being played?

Let’s say that we watch television a lot, yes. Professional secrecy prevents me from giving you names. The footballers we represent come mainly from Germany, Belgium, the Netherlands and Luxembourg. We'll win the Euro regardless of the name of the final winner…

Does sports-related wealth management in Luxembourg have as good a reputation as one might think?

Yes! Luxembourg is very well recognised in this area. The grand duchy also has and will have a card to play in the future. We are among the most interesting markets in the world, being the largest cross-border financial centre in Europe, the second country in the world with the most investment funds behind the US... And we have a most comprehensive toolbox.