Formula One is the electrifying motorsport series that sees 10 pairs of drivers battle it out at 20+ circuits worldwide each year to compete for the Formula One World Champion title.
It’s notoriously expensive to run an F1 team, with engine development alone costing some manufacturers over £500m. Even a single steering wheel can cost a team over £50,000.
In such a sport, teams need to be considered and managed as businesses in their own right.
As an investor, it may have crossed your mind that all this money must be coming from somewhere. If equity or debt investors are required, is this door open to retail investors? Can everyday stocks & share ISA account holders own a piece of the Formula One ecosystem?
While investing in your favourite brands isn’t probably the best idea from a financial standpoint, it can be enjoyed as a demonstration of support and commitment to a sports team.
In other words, is it actually possible for you to invest in a Formula One team? Let’s explore this below for each of the most popular teams. We’ll examine the investment opportunity available in descending order based on the 2021 constructors rankings.
All investments discussed in this article will be equity investments that you can make through some of the best UK stockbrokers or Stocks & Shares ISAs, such as eToro (review), Hargreaves Lansdown (review) and AJ Bell (review).
Mercedes-AMG Petronas Team
If you’d like to back the winners of the 2021 constructors title, look no further than the Mercedes team.
Their ultimate parent company is Mercedes Benz Group AG, which is listed on Frankfurt Stock Exchange and Stuttgart Stock Exchange under the ticker symbol MBG.
Alongside the Mercedes-AMG Petronas Formula One Team, your holding would indirectly include:
- Mercedes Benz (vehicle sales)
- Daimler Trucks
- Mercedes Benz Financial
Together, the group produces over 2,000,000 vehicles each year.
The Mercedes Benz Group does not wholly own the team. In fact, as of writing this article in 2022, their holding is only 33%. Other significant shareholders include Ineos (the chemicals group that features prominently in the livery of the F1 car) and Team Principal Toto Wolff.
Bizarrely, because Ineos is a smaller company than Mercedes (Ineos $17bn, Mercedes $78bn), yet holds a similar stake in the team, an investment in Ineos would result in a far higher indirect holding of the F1 team compared to buying Mercedes shares.
Red Bull, known formally as Oracle Red Bull Racing is wholly owned by a private drinks marketing firm Red Bull GMBH.
Fans of Max Verstappen and Sergio Perez will be disappointed to learn that due to the private status of these corporate owners, retail investors cannot directly or indirectly invest in the highly competitive team that saw Max lift the Driver Championship trophy in 2021.
Ferrari is synonymous with Formula One. With its bright red livery, Ferrari drivers have dominated the championship at multiple points across Formula One’s 76-year history.
You can invest in Ferrari NV, a company listed on Borsa Italia under the ticker symbol RACE. Ferrari NV wholly owns the racing team, making this a simple way to build an ownership stake in the same team founded by Enzo Ferrari in 1929.
Mclaren is a British Sports Car Manufacturer and Formula One team based in Surrey, England.
Based on a recent global survey, Mclaren is the most popular team and it has an illustrious history. It took home 8 constructor titles between 1974 and 1998.
Unfortunately, like Red Bull, Mclaren is privately held by Mclaren Group – a private company owned by the Mumtalakat Holding Company (56%) and TAG group (14%) together with a collection of minority shareholders. Mumtalakat is the sovereign wealth fund of Bahrain.
Alpine sounds like a newly arrived team on the grid, but it’s in fact a rebrand of the long-established Renault team. Renault S.A. is the ultimate owner of the team, and its shares trade under the RNO ticket symbol. Over 62% of its shares are in public hands.
Red Bull’s ‘sister team’ AlphaTauri is unsurprisingly also owned by Red Bull, therefore investing in this team is also off-the-cards.
However, Honda, which previously featured prominently in the team name, and is still supplying engines until 2025, is listed on the Tokyo Stock Exchange as ‘Honda Motor Company Ltd’ under the ticker ‘TYO’.
Aston Martin Aramco Cognizant
Continuing the trend of private ownership is the Aston Martin team, which is currently owned by a consortium of private investors led by Lawrence Stroll – a fashion mogul.
While equity investment isn’t an option, more adventurous investors were given an opportunity to participate in a funding raising round via a debt issue from Aston Martin Lagonda.
These were placed in 2020 offering a rate of 10.5% on the face value of the corporate bond at the time, suggesting that investors saw a high level of risk in these senior debt notes.
We hope you enjoyed this explainer of how to invest in your favourite F1 team. This article was designed to enlighten you as to whether putting your money into an F1 team is possible, but this is not financial advice. Many Formula One teams are not cashflow positive, and instead, rely upon subsidies by corporate parents, and therefore Formula One teams themselves are not generally regarded as sound long-term investments.