Motorcycle racing is a profitable business, it turns out. The leading UK financial paper Financial Times reported yesterday that Bridgepoint Capital, the private equity firm which owns Dorna, among many other assets, has hit upon a relatively novel way of paying out investors, by transferring the roughly 40% of Dorna which it owns between one Bridgepoint fund and another.
The proposed sale is a result of a review carried out by merchant bankers Lazard at the end of last year, with the aim of fixing a value and finding potential buyers. According to the FT, several private equity firms expressed an interesting in buying Bridgepoint's stake, including former owners CVC.
That sale is now off the table, it appears. Instead of selling Dorna to an outside party, Bridgepoint is now investigating setting up a separate, internal fund and moving it from one fund to another, paying its investors from the transfer between the two funds. The sale allows Bridgepoint to pay out Dorna's increased value to investors who put their money into the fund Bridgepoint set up to hold Dorna in 2008, after it had performed a similar maneuver between 2006 and 2008.