It's a historic day for Inter and Serie A soccer as the American based fund Oaktree Capital Management took ownership of the Serie A champions after Inter's owners defaulted on a loan, failing to repay by this week's deadline. The U.S. fund has taken control of the team from the Chinese conglomerate Suning Holding Group Co. after Inter's holding companies "failed to repay €395 million ($428 million)," Oaktree said in a statement.
Former Inter president Steven Zhang and Suning purchased a 68.7% stake in the club in 2016 and took out a €275 million loan at 12 per cent interest from Oaktree to support the club after the COVID pandemic in 2021 and the amount has increased to almost €400 million that needed to be repaid this month. Zhang tried other ways to repay the debt, such as involving others funds such as Pimco into the negotiations and another possible loan, but failed.
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Over the weekend, Inter's former president released a strong statement to "address the speculation concerning our club's financial stability" before accusing Oaktree of "a lack of meaningful engagement." Oaktree confirmed the takeover Wednesday in a statement.
"As of May 22, funds managed by Oaktree Capital Management, L.P. ("Oaktree") have assumed ownership of FC Internazionale Milano. This follows the non-repayment of Oaktree's three-year loan to Inter Milan's holding companies that matured on 21 May 2024 with a total balance due of approximately €395 million.
"In May 2021, with Inter forecasting record financial losses during the 20/21 season, Oaktree provided its holding companies with rescue capital to stabilize the Club's financial situation and enable it to continue operating, including to pay its players and employees. In the three years since Oaktree's rescue financing, Inter has lifted its eighth and ninth Coppa Italia, secured its sixth, seventh, and eighth Supercoppa, earned its 20th Scudetto title and historic second star, and reached the UEFA Champions League final for the first time since 2010.
"Oaktree is dedicated to achieving the best outcome for the long-term prosperity of Inter, with an initial focus on operational and financial stability for the Club and its stakeholders. Oaktree values the legacy of the Club, the passion of the players, the loyalty of the Interisti, and the Club's significant role in Milan, Italy and the global sporting community. Oaktree is committed to working closely with Inter's current management team, partners, the league and governing bodies to ensure the Club is positioned for success on and off the pitch; focusing on robust management, operations and governance with a vision for sustainable growth and success."
Suning acquired Inter in 2016 and started a big revolution at the club that brought players such as Romelu Lukaku (Suning's most expensive signing), Lautaro Martinez and the current team that just won the Serie A title after an incredible and exciting season under coach Simone Inzaghi. Under Zhang, Inter won two Serie A titles (in 2021 with Antonio Conte and this season), two Coppa Italias and three Supercoppa Italianas, becoming the second most decorated president in the history of the club after Massimo Moratti.
With the Covid-19 pandemic, however, everything changed as the club started to suffer financial issues that led Suning to ask Oaktree for rescue capital to stabilize Inter from a financial point of view. On top of that, the Chinese government stopped their interest in football investments, both inside and outside China. The other soccer club Suning owned, Jiangsu, went bankrupt in 2021.
What comes next?
Looking ahead, there won't be big changes at the club in the short term, as Oaktree pledged in their official statement. Inter will continue to work in the same way with the same management directed by Inter CEO Beppe Marotta, who arrived at the club in 2018 and brought the Nerazzurri back to win titles. The Nerazzurri will continue to work with the same strategy for transfers and player exchange as they did in past years, focusing on the financial stability of the club while the main priority will be the new contracts of players like Nicolò Barella and most importantly captain Lautaro Martinez, with the current deal to end in 2026.
It's still not clear for how long the fund will be in charge of Inter, as the main priority will be to find new owners in the future, a similar situation to what another American based fund, Elliott, did with AC Milan. It's fair to say that the example of Inter's rivals is not too similar to this one, as the clubs themselves are in completely different competitive situations, as Inter are coming off a Scudetto while Milan had struggled. That means that for Oaktree to achieve their target of finding the best owners for the future of the club, the clear way to do it is to continue the success of the recent years.
What to know about Oaktree?
Oaktree Capital Management is an "American global asset management firm specializing in alternative investment strategies." As of March 31, 2023, the company managed $172 billion for its clientele. Oaktree's clientele includes 67 of the 100 largest US pension plans, 40 state retirement plans in the United States, over 400 corporations and/or their pension funds, over 300 university, charitable and other endowments and foundations, and 15 sovereign wealth funds. According to The Wall Street Journal, Oaktree has "long been considered a stable repository for pension-fund and endowment money."
