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Rory McIlroy's Next Big Investment
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Hey Friends,
Rory McIlroy is one of the most talented golfers in the world. The 32-year-old from Northern Ireland has 28 professional wins, including 4 major championships.
He has spent more than 100 weeks as the top-ranked golfer globally and has earned more than $58 million in prize money throughout his career, good for 6th most all time.
All-Time Golf Money Leaders (On-Course)
Tiger Woods: $120 million
Phil Mickelson: $94 million
Dustin Johnson: $72 million
Jim Furyk: $72 million
Vijay Singh: $71 million
Rory McIlroy: $58 million
Adam Scott: $57 million
Justin Rose: $56 million
Sergio Garcia: $54 million
Matt Kuchar: $53 million
The part you didn’t know? As the founder of Symphony Ventures, a two-year-old investment fund headquartered out of Dublin, Rory McIlroy is also quietly building an impressive and diverse investment portfolio.
He has invested in about 15 different companies across health, wellness, technology, and more, but his next big bet comes in an area he knows very well — golf.
Rory McIlroy and Symphony Ventures made a strategic investment in Drive Shack’s new competitive golf venture, “Puttery,” earlier this year.
For those who aren’t familiar, Drive Shack is an entertainment company that operates golf-related leisure venues designed to bring people together through competitive socialization. The concept is similar to Topgolf, and the business currently has four locations that are live & playable, with an additional two opening this year or next.
Current Drive Shack Venues
Orlando, Florida (Opened 2018)
Raleigh, North Carolina (Opened 2019)
Richmond, Virginia (Opened 2019)
West Palm, Florida (Opened 2019)
That part of the business is growing and continues to show momentum through increasing cultural appetite, but Drive Shack also owns and operates a portfolio of golf courses throughout the country that make up the majority of its revenue currently.
In total, Drive Shack is expected to bring in nearly $300 million in revenue this year, but they might not turn a profit as they continue to reinvest in the construction of more facilities.
Here’s a look at their recent financial performance — DS represents their Drive Shack entertainment locations while AGC represents their physical golf course portfolio.
So, where does Rory come in? He invested in their new business called “Puttery,” an indoor putting course that provides entertainment through live music, good food, and premium cocktails.
Think of it as a scaled-down version of the driving range concept that Top Golf and Drive Shack popularized, but for putting instead. The first course in Dallas, Texas, has a rooftop bar and four 9-hole courses, each offering different vibes.
The Rooftop Course
The Lodge Course
The Library Course
The Illusion Course
The Rooftop Bar
The Puttery concept is somewhat new, but the interesting part comes when looking at the venue-level economics.
The average Drive Shack venue is about 50k to 60k+ square feet, takes about 2 years to build, and construction costs run between $25 million to $40 million, but the average Puttery venue is 15k to 20k square feet, takes about 9 months to build, and construction costs run between $7 million to $11 million.
Drive Shack Venue Economics
Size (sq. ft.): 50k to 60k+
Development Time: 18 to 24 months
Development Cost: $25 to $40 million
Total Revenue: $15 to $25 million
Venue EBITDA: $4 to $6 million
Development Yields: 10-20%
Puttery Venue Economics
Size (sq. ft.): 15k to 20k
Development Time: 6 to 9 months
Development Cost: $7 to $11 million
Total Revenue: $7 to $11 million
Venue EBITDA: $2 to $3 million
Development Yields: 25-40%
Despite the lower per venue EBITDA economics, Rory and his team felt that the 25% to 40% projected development yields on Puttery locations were attractive enough to invest in.
The result was Symphony Ventures (Rory’s fund) committing an investment of at least $10 million over Puttery’s three-year development schedule. In exchange, they’ll receive 10% ownership in the equity of each Puttery venue that is planned to open through 2023 at a price equal to 10% of the total cost to build each venue.
After 2023, Symphony Ventures will have the right, but not the obligation, to invest on the same terms through all Puttery venues that open by the end of 2023.
Drive Shack plans to have 7 venues open by the end of this year — locations range from Texas & Florida to North Carolina & Washington DC — with an additional 10 Puttery venues expected to open in 2022.
This investment will take some time to play out. Drive Shack has to build the facilities, but we also have to wait and see how popular they become. Until then, these numbers are just projections. They might end up being optimistic, or they might end up being conservative. No one really knows yet.
Regardless, the economics are fascinating, and while every other major professional golfer seems to venture into course design after their playing days are over, it’s interesting to see Rory actively make investments in healthcare, technology, and real estate while he’s still competing for major championship victories.
Have a great day, and I’ll talk to everyone tomorrow.
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