As we all probably know by now, Kim Kardashian is a founder of her own Venture Capital/private equity firm. To be honest, most people I have spoken to in finance look down upon the venture mainly due to Kim’s previous history. However, personally, I think it's ironic that people are questioning a person's morality within private equity when the main goal of a fund is to make significant returns for its investors.
Looking at the fund's team, they currently have ex-Carlyle partner Jay Salmon, as well as two VPs with backgrounds at GS and PE firms (Bain Capital & Carlyle Group). Despite it being branded as a private equity firm, Kim stated,
“The exciting part is to sit down with these founders and figure out what their dream is. I want to support what that is, not change who they are in their DNA, but just support and get them to a different level.”
This obviously sounds more like leaning toward the side of growth equity.
Does anyone have any opinions on whether they think this venture will be successful? Any current updates on progression with raising funds with LPs? Are they likely to start attracting top tier analysts? Or do they think celebrities add any value within the PE space?
At the end of the day, the only 100% foolproof strategy to making money is: buy low and sell high. I honestly don’t see why Kim K’s team can’t do that - seems like she’s surrounding herself with intelligent advisors.
I’ve always told incoming class of juniors who come from the sellside that investing is not rocket science and is a trade that can be taught on the job. There are certain skills and knowledge that you acquire over time that can make you a better investor (bespoke modelling, understanding certain nuanced legal concepts, knowing which KPIs/metrics are actually useful, etc.), but the core of investing is still “buy low and sell high”.
The same people who look down on Kim K ought to look at the track record of Ryan Reynolds - he is no target school finance major, but is doing fairly well. Point being that everyone - including Kim K - has something that others can learn from.
I’m not too up to date on fundraising but I’m sure they will do OK given the selling point of all their connections and Kardashian name, as I’m sure investors see the potential of branding and utilizing the Kardashian brand. Obviously this will change if performance doesn’t do well but I’m sure investors will take a bet on it initially.
I think they will actually be fairly successful in the growth space within C&R, and maybe to a lesser extent media. I don’t doubt the selling ability the Kardashians and friends are able to drum up once they associate with a company or brand, and I think there will be some other firms looking to replicate this Strategy with other influencers.
the one thing I am curious of is how involved Kim and Kris will be. I think their involvement should be mainly in just utilizing their network to get ideas and to use their brand; I don’t believe they should be more involved than that. That being said they have a lot of other stuff going on as well so I am curious if things start going poorly they will barely spend any time on it and will make performance even worse.
TLDR: I think they will be fairly successful in growth investing in C&R space.
All they have to do is find some skin care or fashion start up and get the Kardashians to promote the hell out of it and put it all over their shows/ instagram accounts and they’ll 10x revenue. Easy money.
Her family has an audience of millions of loyal fans that will buy whatever they put on their social media. Couple that with a legit team of PE professionals makes me think everything will work out well.
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