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Illustration: Aïda Amer/Axios

Pro athletes are diversifying into private equity, after years of focusing most of their alternative investment activities on real estate and tech startups.

The state of play: The driving financier is Mark Patricof, who previously led a media and entertainment-focused investment bank that he sold in 2015 to Houlihan Lokey. His inspiration struck several years ago, when co-hosting a "Shark Tank"-like show with former New England Patriots star Rob Gronkowski, in which winning founders received pro athlete endorsements.

  • "I realized that a lot of these athletes had no exposure to private equity, and really didn't understand what it was. It felt like an opportunity," Patricof tells me. "And plenty of companies and private equity firms like being associated with pro athletes."
  • He received financial backing from J.P. Morgan for a co-investment platform, whereby athletes like J.J. Watt, Venus Williams, Victor Oladipo, C.C. Sabathia, and Henrik Lundqvist get the opportunity to participate in deals led by such private equity firms as L Catterton and Providence Equity Partners.
  • Patricof and his team identify co-investment opportunities, and athletes get deal-by-deal participation rights. Patricof's other investors, including JPM, fill up the remaining allocation.

This is the convergence of two trends: Pro athletes becoming more sophisticated about their money, seeking more diversified investment options, and private equity firms trending toward co-investment over syndicate partners.

  • Patricof is one of the first to play at this new apex, but will hardly be the last.

Go deeper

DOJ watchdog to probe whether officials sought to alter election results

Former President Donald Trump and former First Lady Melania Trump exit Air Force One in West Palm Beach, Florida, on Jan. 20. Photo: Alex Edelman/AFP via Getty Images

The Justice Department's inspector general will investigate whether any current or former DOJ officials "engaged in an improper attempt to have DOJ seek to alter the outcome" of the 2020 election, the agency announced Monday.

Driving the news: The investigation comes in the wake of a New York Times report that alleged that Jeffrey Clark, the head of DOJ's civil division, had plotted with President Trump to oust acting Attorney General Jeffery Rosen in a scheme to overturn the election results in Georgia.

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Axios Re:Cap goes deeper into what Google is doing, and why now, with Dr. Karen DeSalvo, Google's chief health officer who previously worked at HHS and as health commissioner for New Orleans.

Biden signs order overturning Trump's transgender military ban

Photo: Tom Brenner/Getty Images

President Biden signed an executive order on Monday overturning the Trump administration's ban on transgender Americans serving in the military.

Why it matters: The ban, which allowed the military to bar openly transgender recruits and discharge people for not living as their sex assigned at birth, affected up to 15,000 service members, according to tallies from the National Center for Transgender Equality and Transgender American Veterans Association.