777 Partners, the American fund that stirs controversies in football

Accused of lack of transparency regarding its projects and financial status, to the point of irritating club officials in which it has invested, the American investment fund 777 Partners sparks controversies and special surveillance by football authorities.

On Wednesday (15), the 4th Business Court of the Rio de Janeiro State Court removed American group from the control of Vasco’s SAF, which returned to the associative club.

The Rio team expressed its ‘concerns about the financial capacity’ of the majority partner and requested the recovery of control to prevent the fund from transferring its shares to other ‘external entities’.

The group purchased 70% control of Vasco’s SAF in September 2022 for about R$700 million, with the promise of clearing the club’s debts and investing in football. However, the relationship between them has been troubled for months.

In the sports field, the team’s poor results, which narrowly avoided relegation to Serie B in the last round of last year’s Brazilian Championship, and a below-par season start sparked protests from Vasco fans.

777 Partners has taken over clubs in various countries: Germany, with Hertha Berlin; Italy, with Genoa; Belgium, through Liège; and France, with Red Star.

There was also a case of resistance at the Belgian club. On May 10, fans prevented players from entering the stadium for a home match in the Belgian Championship. The game did not take place.

Two days before, Liège announced that it was temporarily banned from registering with its country’s federation ‘for not being able to provide all the requested payment proofs within the specified deadlines.’

Liège’s director, Pierre Locht, tried to calm the situation, stating that the club ‘is not on the verge of bankruptcy.’ However, the director and another administrator resigned from their positions ‘to avoid being complicit with 777,’ as reported by Le Soir newspaper on Thursday.

777 Fund also holds minority stakes in Sevilla and Melbourne Victory.

The mounting debts regarding the company’s solvency escalated with the recent international press revelation of lawsuits against it in the United States.

One of them dated back to early May, for a $350 million loan supported by ‘nonexistent’ financial guarantees, according to British asset manager Leadenhall Capital Partners.

The whistleblower accuses the fund of fraudulent behavior comparable to a ‘Ponzi Scheme,’ or in other words, acquiring assets by indebting themselves before using them as collateral to acquire others.

According to the British company, this is how the American fund intended to acquire Everton. The acquisition project had been announced in September 2023 but was blocked in the UK authorities’ solvency oversight system.

‘It is curious that a fund like this, which invests in everything from airlines to insurers, wants to be present in football without competition for it,’ says Belgian political scientist Jean-Michel De Waele, who is also a sports sociologist at the Free University of Brussels.