Black athletes have created generational wealth. The asset-management industry that compounds that wealth is still overwhelmingly owned somewhere else.
Black Wealth Project is building a player-owned asset management company. The first product solves one concrete problem: helping eligible investors move appreciated stock portfolios toward broad-market exposure without selling first.
We are not asking investors to accept worse economics for a social mission. The first product should make sense on its own. Player ownership is why we're building the institution around it.
An investor may own appreciated public stocks that are more concentrated, more complicated, or simply different from what he would choose today. Selling can trigger capital-gains tax before the new portfolio even starts compounding.
NBA players collectively control substantial investable capital. That creates the opportunity to do something different: use that capital and network to help build an asset manager in which players themselves have an ownership stake.
We are developing a U.S. equity ETF intended to provide broad-market-like exposure. At launch, investors with qualifying appreciated portfolios could potentially contribute securities in exchange for ETF shares through a Section 351 transaction rather than liquidating those securities first.
Your portfolio may have significant embedded gains and may no longer be the portfolio you want to own for the next decade.
A conventional transition means selling, paying the resulting tax, and then investing the remaining capital in the new strategy.
In a qualifying transaction, contributed securities are exchanged for ETF shares. The existing tax basis carries forward. The tax is deferred, not erased.
The contributing portfolio generally needs to already satisfy the relevant diversification test: no more than 25% in one issuer and no more than 50% in five or fewer issuers. Not every portfolio qualifies, and actual eligibility requires professional tax and legal review.
Start with equal return assumptions. That isolates the value of tax deferral instead of assuming the new portfolio will outperform. Then test what happens if your current portfolio trails the market-like portfolio.
Asset management is one of the businesses through which enormous fortunes are compounded and institutions are built. Black Wealth Project starts from a simple premise: players who have already created substantial wealth should have an opportunity to own part of the infrastructure managing wealth too.
We are starting with current and former NBA players because the community has the capital, relationships, and shared experience necessary to build something together.
Join the conversationNo. In a qualifying transaction, gain generally is not recognized at contribution. The existing basis carries into the ETF shares, so the embedded gain remains. This is deferral, not erasure.
No. For a contribution of stocks and securities to avoid being treated as resulting in diversification under the relevant rules, a contributing portfolio generally needs to satisfy the 25/50 diversification test: no more than 25% in any one issuer and no more than 50% in five or fewer issuers. Other requirements also apply. Eligibility has to be determined from the actual portfolio and transaction.
Yes. Section 351 generally requires the transferring person or group to control the corporation immediately after the exchange. The applicable definition of control uses an 80% threshold. That is one reason the launch needs to be coordinated among the contributing investors.
No. The concept is intentionally not based on extraordinary expected returns. The intended destination is diversified U.S. equity exposure with market-like risk and return characteristics.
No. The company's mission is centered on Black wealth creation and player ownership. The proposed fund is not being designed with race-based investor eligibility. Final eligibility, launch mechanics, and offering terms will be established in the fund's eventual governing and offering documents.
No. The ETF is a pre-launch concept. We are currently speaking privately with current and former players and their representatives while we develop the company and product.
We're talking with a small number of current and former NBA players and people in their networks about the idea, the product, and what it would take to build a player-owned asset manager.