The ultimate vanity asset – a £60m footballing Angel

At one of the Berkshire AGMs, Warren Buffett was asked whether he would invest in a sports team. Never, said Buffett. Those are vanity assets, not investments. Not everyone thinks so. Last week a Hedge Fund, Lansdowne, invested almost R1bn to buy another 3% stake in UK football club Manchester United, taking its holding to around 10% of the New York listed shares. Lansdowne is engaging in another exercise of which Buffett disapproves – buying solely in the hope you'll be able to sell it on to a greater fool. Fortunately for Lansdowne, there seems to be plenty of those to go around.Research released in February by financial analyst Stephen Clapham revealed that UK football clubs lost a combined £1.2bn in trading players during the decade to end 2012. Whether Lansdowne's principals read that report is a moot point. Manchester United, which endured a poor last season and is off to a weak start to the new one, is poised to break the UK transfer record by paying £60m to secure the services of Argentinian international Angel di Maria. He may help the team. But shareholders aren't likely to see much of a return. Another warning on vanity assets. Never delude yourself they're an investment.

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