THIS SUMMER should see the launch of at least two funds that will acquire equity stakes in football players.

Hero Investments, set up by two former City fund managers, hopes to raise up to £100m and is working with the football agent Pinhas Zahavi and former Premier League referee David Elleray.

Sports Asset Capital (SAC) will launch a £50m fund and has been set up by Ray Ranson, a football finance entrepreneur, best known for inventing the technique of “sale and leaseback” of players by clubs.

Ranson’s fund will be based in the Cayman Islands but managed in Britain by a vehicle called Sport Asset Management, which is regulated by the Financial Services Authority.

Ranson is being advised on potential investments by Bill Gerard, a sports expert at Leeds University Business School. Ranson will also be able to call on ProZone, a business he owns that provides data on the performance of players.

Hero has been set up by Nick Hely-Hutchinson and Damian Robert, who were colleagues at Teather & Greenwood, the stockbroker. Their vehicle will be a closed-end fund based in Jersey. They, too, have FSA approval.

Zahavi, who has been involved in some of English football’s biggest transfers, will be the main source of investment ideas. He and Elleray, along with David Griffith-Jones QC, a barrister who specialises in sports law, are all consultants to Hero.

Both funds plan to co-invest alongside clubs to acquire players, typically taking stakes of between 25% and 75%. When the clubs eventually sell the player, the funds will take their percentage of any profit.

The strategy is not without risk — for example, a player’s career could be hampered or ended by serious injury.

While the players’ trade union, the Professional Footballers’ Association, is known to be unhappy about schemes such as those planned by Hero and SAC, football clubs are said to welcome them.

These sorts of funds will help to spread their risk and allow them to invest in players whom they might not otherwise be able to afford.