Kim Kardashian | Bloomberg
It’s hard to keep things fresh after 15 years. Apple’s latest iPhone contains some new features, but in many ways it’s the same product introduced in 2007. There’s no reason to change much, considering in June Apple overtook the Android smartphone ecosystem with more than 50% of the market.
Which brings us to Kim Kardashian. Doesn’t everything?
Kardashian was introduced to America in 2007 when the reality-show starring her squabbling family debuted. Unlike the iPhone, she has embarked on a new direction with the unveiling last week of her private-equity firm, Skky Partners.
Before dismissing the venture as Kardashian’s latest publicity stunt, look at her business record.
She is co-founder of a line of shapewear, Skims, which Pitchbook said is valued at $3.2 billion. The key to Skims’ success, a knowledgeable colleague tells me, is that it’s cut to fit underneath a wide variety of dresses and, unlike most brands, comes in a variety of colors to match skin tones. Kardashian’s cosmetics outfit, KKW, is valued at $1 billion. A package containing face cream, cleanser and other items costs $575.
Clearly, Kardashian knows how to turn social capital into real capital.
For her private-equity venture she’s teaming up with a former Carlyle partner, who presumably will vet deals for her approval. Skky hasn’t raised cash yet, but let’s assume its fund attracts $1 billion and charges investors the standard 2% private-equity management fee. In that scenario, Kardashian and her partner would each pocket $10 million in fees every year over the life of their fund, which likely would have a 10-year duration. On top of that, they would share a 20% slice of annual investment gains.
Instagram influencers of the world, take note: This is how you make real money.