From Mongolian football to the ‘Pasta Prince of LA’

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Never before has it been so easy to invest in the Mongolian Premier League’s ninth-best team.

Brera Ilch FC (formerly Bayanzürkh Sporting Ilch) last Saturday sank to a 6-1 loss in its first game under the control of Brera Holdings, a Nasdaq-listed “social impact football (American soccer) business” that owns other clubs in North Macedonia, Italy and Mozambique. Think Todd Boehly’s Blueco 22 but with much better players. 

Brera’s shares have fallen almost 70 per cent since it IPO’d 14 months ago. The club’s executive chairman is one Daniel J. McClory, an Italian-American investment banker — and self-described venture philanthropist — who is also managing director, head of equity capital markets and head of China at US underwriter Boustead Securities.

Brera’s IPO was underwritten by Revere Securities, not Boustead. But Boustead did work on a $1.3mn private placement in 2022. As part of its compensation for that private placement, Brera issued it a five-year warrant to buy up to 93,100 shares at $1 per share, “subject to adjustment”, according to Brera’s IPO filing.

When it comes to share-price performance, at least, companies underwritten by Boustead have a patchy record. McClory acknowledges that shares in the 14 companies it took public last year — including a group marketing Lionel Messi-inspired sportswear and a start-up that sells pills to treat erectile dysfunction — have since fallen “precipitously, many in the same range, between 70 and 80 per cent”.

Some shareholders of Boustead’s Chinese clients have fared even worse. The Boca Raton-based broker has taken seven Chinese small-cap companies public since 2019, according to its websites. Of those, four enjoyed unusually successful openings, rising hundreds or even thousands of per cent in the space of a few days only to collapse soon after. Shares in the other three companies did not initially shoot higher but have all since fallen by more than 80 per cent.

Speaking with us this week, McClory pointed out that the market for “certain small-cap IPOs has not been good for the last two and a half years”.

With Brera, “the real value creation is going to happen with capital gains,” McClory said. “We intend to buy teams, like a Serie B team, and have the unlocking of value occur for two reasons: one would be eventual advancement and perhaps promotion . . . and two, just getting them inside a public vehicle, which allows for liquidity and share price appreciation so you can realise gains before you even sell the teams.”

Last year, McClory told FTAV that he had no idea why IPOs underwritten by Bousted tended to trade so erratically. “There’s probably a background or a quasi-explanation for every one of these,” he said. “It boggles my imagination how that occurred and why [the shares] moved the way they did.”

Boustead turns away “between two-thirds and 70 per cent” of the companies brought to it by auditors, legal firms and often the Nasdaq itself, McClory said in that 2023 interview. “We’re not out banging on doors, doing beauty contests trying to woo companies”.

Those that make the cut are offered out to the broker’s list of roughly 3,000 investor clients, most of whom McClory said are “ultra high net worth private clients based in the US, family-office-type investors, in some cases smallish funds, but not institutions [or] names you would know.”

Affable and generous with his time, McClory unwinds by serving on the board of directors of the USA Track & Field Foundation, along more than 40 other athletes, executives and notables, including Blackstone’s Steve Schwarzman and novelist Nicholas Sparks. He also hangs out with aristocrat Emanuele Filiberto di Savoia, the grandson of the last reigning king of Italy. 

The two pals even run a sort-of-company together — an “immersive, futuristic, fantasy-based” AI-powered MMORPG called The RoyaLand that was apparently inspired by the passing of Her Majesty Queen Elizabeth II of England.

(Carb fans may recognise Emanuele, with his hospitality hat on, as the “Actual Pasta Prince of LA”)

The RoyaLand project remains under development, though anyone desperate to know when they can play could ask McClory himself at Boustead’s annual “Boca Bash” on March 21st, or the sixth annual Notte di Savoia Los Angeles three weeks later.

In the meantime, Brera Holdings’ shares are becoming something of a spectacle themselves. They had already spiked twice this year before jumping this week after McClory acquired a further 4.55mn shares, taking his holding to 54.5 per cent.

With additional reporting by Alexandra Scaggs