BLACKSUN PRIVATE EQUITY | Alternative Asset Management

BLACKSUN
PRIVATE EQUITY, INC

BlackSun Private Equity, Inc is an emerging global leader in alternative asset management, private equity, and intentional wealth creation. BlackSun specializes in providing stable and high yielding returns for a diverse group of savvy investors including sovereign wealth funds, public and private pension funds, insurance companies, endowments, family offices, and high net-worth individuals.

BlackSun believes that business is a Sacred Force for Good, and that Wealth is meant to Serve All Life.

We invest in companies that illuminate the present and inspire our incandescent future.

Purpose Thesis:

BlackSun Private Equity partners with visionary founders and assets that harmonize innovation, profitability, and planetary stewardship. We see wealth as a living force - meant to elevate life, regenerate value, and build the luminous economies of the future.

"The role of Private Equity and Venture Capital is not only to back innovation but to back evolution - investing in what makes us more human."

-Atonn Muhammad

Founder, CEO

BlackSun Private Equity

SUPPORTING THE FUTURE OF TECHNOLOGY

TARGET SECTORS

SPORTS

Today, sports investments represent lucrative and often coveted opportunities.

With its reliable market demand from a relentlessly hungry consumer base, the breadth of sport investment opportunities range far and wide. From brand ownership, to real estate, to products and services, to professional team ownership and beyond, sports provides a market for both cashflow and capital appreciation.

Presently, pro sports teams rank among the most reliably profitable, highly desired investment opportunities that exist.

Over the past 40 years, every team in all four of the United States’ major sports has increased exponentially in value— at an average rate that far outpaces both inflation and the S&P 500.

They’ve proved largely impervious to the busts, recessions, foreclosure crisis, and pandemic that have stalled growth in other industries.

Team values have boomed. The average value of an NBA team is $4 billion, MLB $2.64 billion, and NHL $1.31 billion—a third of what Bain was willing to pay for all 30 clubs less than 20 years ago.

Growth of North American team values has outpaced the stock market over the past three decades, no small thing considering the U.S. stock market has appreciated 550% the past 20 years.

It isn’t hard to find a billionaire who wants to be the controlling owner of a franchise, but it is increasingly difficult to find someone who wants to write a $100 million check for a small piece of equity and then fight over seats and parking passes.

Most every major league—and soon will likely include the NFL—allows private equity (PE) funds to own stakes in their teams, to the point that institutional investors are almost ubiquitous:

At least a dozen teams in the NBA, NHL, MLB and MLS have private equity among their ownership groups.

MEDIA / ENTERTAINMENT

Media and entertainment companies should be thinking more about the world ahead than the one they’re being forced to leave behind.

Beyond mass appeal: The untapped potential of fandom.

Fans of certain musicians, movies, video games, TV shows, or sports teams–though segmented audiences–drive substantial engagement and present big opportunities for cross-platform growth.

Media and entertainment (M&E) companies largely focus on dominating market share and appealing to the masses. But our data suggests that focusing on segmented, hyper-engaged groups of fans could prove just as valuable. Even though different fan groups—music fans, movie fans, video game fans, TV show fans, sports fans, and what we call “M&E super fans”—are segments of the broader population, these cohorts evangelize their fandoms, are willing to follow them across platforms and ventures, and often drive outsized engagement.

Analysis of our 2024 Digital Media Trends data that surveyed consumers who consider themselves fans (of a music artist, movie franchise or series, TV show, video game, or sports team) are more engaged with their preferred media format than more casual consumers. Simply put: The value of these fans is high. Self-identified fans—who skew younger and are often more diverse than the average consumer—are driving the success of media experiences both online and offline. Where movie theater and live performance attendance, for example, have struggled to climb back from pandemic lows, these fan communities may be the key to driving digital and in-person ancillary entertainment experiences.

The intense competition in the entertainment industry will likely push media powerhouses to consolidate their resources and expertise. We may witness large-scale M&A transactions between major media conglomerates to solidify their market position and strengthen their competitive advantage.

Such mergers are expected to create all-encompassing entities that have the capability to produce and distribute content across multiple platforms with augmented capabilities in data analytics and targeted advertising.

As technology and entertainment continue to intertwine, we could also see the marriage of tech giants and media companies. Technology firms have been increasingly interested in media content and its distribution, recognising the potential synergies with their existing platforms. 2024 might see a series of tech-media partnerships, as companies from both sectors seek to leverage each other’s capabilities to create innovative, immersive, and personalised experiences for consumers.

The streaming revolution is showing no signs of slowing down, resulting in fierce competition among service providers. To survive and thrive in this highly competitive landscape, major streaming platforms may turn to mergers or strategic partnerships to expand their content libraries and gain access to new markets. This period could witness significant consolidation in the streaming space, with large platforms acquiring smaller players or joining forces to enhance their offering and market presence.

Key 2023 transactions include:

Endeavor buying WWE; French billionaire Francois-Henri Pinault taking a majority of CAA;
Saudi Arabia bulking up in golf (LIV Golf+PGA)

Mixed Martial Arts (PFL+Bellator); and Disney shelling out for the third of Hulu it didn’t already own.

Paramount Global acquired by Skydance.
UFC and WWE merged into a new company called TKO Group, controlled by Endeavor.

Vice Media was sold to Fortress Investment Group and others for $350 million. Charlie Ergen’s two companies, Dish Network and EchoStar, merged in an all-stock deal.

Dan Snyder sold the Washington Commanders NFL franchise to the Harris Group for $6 billion – a record in North America.

Mark Cuban got NBA approval to sell the Dallas Mavericks to Vegas Sands Corp., owned by the Adelson and Dumont families, for about $3.5 billion.

Theme park operators Six Flags and Cedar Fair merged.

Lionsgate closed its acquisition of eOne from Hasbro for $375 million in cash plus the assumption of some production financing loans.

Paramount is exlporing a sale of BET.

TECHNOLOGY

Innovative technology is at the heart of human society in the 2020's. It's effectiveness and dissemination will change the way we live and evolve in the years to come.

• Artificial Intelligence (AI).
The global AI industry is thriving. In 2021, AI global funding doubled to $66.8 billion, and a record 65 AI companies reached $1B+ valuations, up 442% from the previous year. Each year, more and more companies and governments worldwide adopt AI solutions.

• Digital Connectivity.
The Internet of Things has the potential to fundamentally shift the way we interact with our surroundings. The ability to monitor and manage objects in the physical world makes it possible to bring data-driven decision making to new realms of human activity, to optimize the performance of systems and processes, save time for people and businesses, and improve quality of life.

• Blockchain.
The global blockchain technology market size was valued at USD 17.57 billion in 2023 and is projected to grow from USD 27.84 billion in 2024 to USD 825.93 billion by 2032, exhibiting a CAGR of 52.8% during the forecast period (2024-2032). Additionally, the U.S. blockchain technology market is predicted to grow significantly, reaching an estimated value of USD 1,37,670.3 million by 2032, as key players are working on creating a wide variety of distributed ledger solutions to address the needs of customers and organizations.

• Healthcare Innovation.
From generative AI to surgical robots, healthcare technology is a fast-moving vehicle for innovation.
In 2024, advancements in technology reshaped the way healthcare is delivered around the world.
"The future of healthcare will be determined by those who have the capabilities, ambition, and vision to launch disruptive technologies that elevate the patient experience,” said Ken Washington, senior vice president and chief technology and innovation officer at Medtronic.

• Quantum Computing.
Quantum computing is not a futuristic concept, but a current reality with key milestones on the near horizon. One of the near-term milestones is reaching a level where quantum machines will routinely outperform even the world’s most advanced supercomputers in simulation tasks, bringing us into an era where classical computing will become incapable of emulating quantum capabilities.

• Machine Learning (ML).
ML allows computers to improve and learn from experience by identifying patterns, making decisions, and incorporating new data into existing models.
While artificial intelligence encompasses the idea of a machine that can mimic human intelligence, machine learning does not. Machine learning aims to teach a machine how to perform a specific task and provide accurate results by identifying patterns.
Deep learning, a major sector of ML, uses sophisticated artificial neural networks to mimic human-like data processing. With its ability to analyze data through hundreds of layers, it surpasses human accuracy in performing tasks, transforming the way we make decisions and take action. This technological advancement is redefining interaction and application across industries, ushering in a new era of intelligence.

Other Innovative Technology:

• Human Longevity and Anti-Aging

• Space

• Software as a Service (SAS) - Augmented by agentic AI

• Financial Technology (Fintech)

• Electric Vehicles

• Carbon Air Removal | Clean Water from Air

REAL ESTATE

Higher rates and scarcer credit make it a tough time for commercial real estate owners—and potentially a good time to invest in stressed properties.

Despite the doomsday headlines, supply and demand fundamentals and leverage levels look solid across most commercial real estate (CRE) sectors. But it’s no secret: The most aggressive Federal Reserve (Fed) rate hiking cycle in 40 years has raised the cost of capital and lowered property valuations, especially for property owners grappling with a higher cost of debt.

Yet even as CRE owners regroup in a more challenging business environment, investors anticipate promising opportunities in stressed CRE markets—if you know where to look.

Investment Opportunities:

How much damage might commercial real estate cause in the broader U.S. economy? We expect it will be limited. We do not think that stress in the CRE market will spark a broader recession.

And in the meantime, the U.S. commercial real estate market continues to offer a wide range of opportunities. As mentioned, we are avoiding the office sector, at least for now, but we find interesting prospects, and at attractive valuations, across the retail, hospitality, industrial and residential (multifamily, senior housing, student housing) sectors.

Across the CRE industry’s interconnected web, we see the potential for compelling risk-adjusted returns in both equity and debt markets, with a focus on key access points:

Buying CRE loans from bank balance sheets: As more bank-originated loans come under stress, more banks may sell loans to strengthen their balance sheets. In addition, many U.S. banks may also seek to create balance sheet liquidity to meet new regulatory capital requirements. In both scenarios, real estate debt investors may be able to purchase non-performing loans or loans experiencing stress at a discount.

Capitalizing on volatility in the securitized CRE debt markets: If spreads widen materially in securitized CRE debt markets (CMBS or collateralized loan obligations), investors with expertise in the properties underlying those securities may be able to take advantage. Opportunities may emerge in deeply discounted loans which are not performing due to overleverage, higher interest expense or a struggling business strategy. A broad-based sell-off in securitized markets may create openings to pursue “pull to par” trades: An investor acquires an asset that is pricing in distress but the investor projects it will be redeemed at par.

Acquiring loan-to-own: Investors experienced in asset restructurings may acquire discounted, non-performing debt to lead a restructuring—and thus become the equity owner of a property at a deeply discounted valuation.

Privatizing publicly traded real estate companies or REITs: To the extent that public equity market volatility creates a wide gap between public market valuations and fundamental value, real estate investors with scale may be able to take-private a publicly traded company at a price far below the value of the underlying property portfolio.

Buying equity at a discount: The impending wall of real estate loan maturities may create growing ranks of motivated sellers seeking an equity infusion or the outright sale of high-quality assets at a discount. Potential buyers may find less competition than they might expect, as investors with perpetual capital pools (REITs, open-ended core real estate funds) have less capital to deploy. In other words, real estate equity investors with dry powder may benefit handsomely from market dislocations.

The day may come when we decide to invest in the battered U.S. office market. But we think it will take some time. Until then, we focus on sectors that are more secular in nature, particularly residential and medical offices. In a challenging environment, we continue to uncover diverse opportunities across the U.S. CRE market – from medical offices and multifamily housing to data centers and hotels.