The Billy Bremner Statue a focal point for Leeds United fans

Can Leeds start to look this guy in the eye again?

Leeds United fans are rubbing their hands in glee at the prospect of a massive cash injection into their club. After years of living in the shadows, despite the presence of Santa Claus’ eccentric half brother, Ken Bates, this will come as some relief for the boisterous Elland Road regulars.

But who exactly are GFH Capital and what is in it for a middle-eastern Private Equity firm? We know that they paid £52m to buy the club and that they are based in Dubai. They are saying the right things, promising to take Leeds back “to where they belong”. But how will they do that, given they have not pledged untold wealth to the club. Importantly, GFH’s CEO is a Leeds fan.

Leeds fans should be slightly cautious about the future of the club, given the practices of a private equity firm. They make money and invest in vehicles and companies in order to do just that. They maximize their investments in a number of ways, and the danger is that GFH’s interest in Leeds United may be fleeting.

There are three main avenues for private equity to make their money: an initial public offering, where shares are offered on the public market; a merger or acquisition; or a recapitalization,  where cash is distributed to the shareholders and its private equity funds either from cash flow generated by the company or through raising debt or other securities to fund the distribution. Complicated? Not really, but the last one of the three could be how GFH take Leeds to a new level.

Private equity firms make longer-term investments in target industry sectors where they have expertise. Elland Road will be hoping that GFH are in it for the long haul rather than a short-term gain.

That might be difficult because the club, while somewhat better off that it was a decade ago, has endured eight years of Ken Bates’ austere regime. Leeds are a big club waiting to happen again, but it will take more than a mid-season splurge on players to make Neil Warnock’s side into the sort of team that can look the likes of Bremner, Giles and Revie in the eye. The question is, do GFH intend to stick around that long to try and make that happen?