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Kim Kardashian will bring 'seismic influence' to the private equity business

·Senior Reporter
·4 min read

Kim Kardashian turned heads this week with the announcement of her latest business venture: private equity.

Kardashian will team up with former Carlyle Group partner Jay Sammons to launch the new private equity firm, SKKY Partners, which will focus on investments in consumer, hospitality, luxury, digital commerce and media sectors.

Kardashian and Sammons will serve as both co-founders and co-managing partners.

Kardashian's entry into the world of private equity comes as alternative investments continue to ride a multi-decade boom on Wall Street.

Data from BlackRock shows allocations to alternative asset classes — which includes private equity, venture capital, and real estate, among others — have risen from around 5% of pension fund portfolios in the mid-90s to north of 25% by the end of last decade.

"Private equity firms have a need for differentiated firm positioning — just like every other business," said Sunny Bonnell, co-founder of branding company Motto.

"[Kim] Kardashian has something that I call a halo effect. Whatever she touches has a high degree of momentum, and that halo effect is ultimately going to directly impact things like loyalty, awareness, perception and association," Bonnell said.

Kardashian's name adds to what Bonnell sees as the four key pillars of brand success: loyalty, awareness, perception, and association.

"Brands are powerful, brands build equity, and Kim Kardashian is undeniably a seismic influence," Bonnell said. "A lot of people underestimate her... nobody ever sees the rebel coming."

Kardashian, who boasts more than 328 million followers on Instagram (META) alone, has a successful track record as both a business owner and investor.

The reality star's entrepreneurial ventures include recently-debuted skincare line SKKN by Kim, beauty brand KKW Beauty (currently shut down for a rebrand), and loungewear company Skims. Kardashian has even ventured into the food space, taking a role as Beyond Meat's (BYND) "chief taste consultant" in June.

"If a brand can get into [Kardashian's] network, that's a very, very different value proposition than a lot of other places are offering," Clayton Durant, a senior manager at public relations firm MikeWorldWide, told Yahoo Finance.

"The VC model is going to really start to shift," Durant said. "Cultural currency is just as impactful as the money and expertise that's traditionally ruled private equity — social capital is the piece that's going to disrupt venture capital and force it to shift its model."

Other celebrities, including athletes Serena Willians and Kevin Durant, YouTube (GOOGL) sensation Jake Paul, and Hollywood elites Ashton Kutcher and Jay-Z, have all launched their own investment firms, further underscoring the power of the influencer and celebrity economy.

"All of these influencers, including Kim, are now starting to understand the value that they bring to the market in terms of their social capital, and the cultural currency that they carry — particularly with Gen Z, Millennials, and very young audiences who are going to be the next big swath of purchasing power," Durant said.

Kim Kardashian arrives at the Vanity Fair Oscar party during the 94th Academy Awards in Beverly Hills, California, U.S., March 27, 2022. REUTERS/Danny Moloshok
Kim Kardashian arrives at the Vanity Fair Oscar party during the 94th Academy Awards in Beverly Hills, California, U.S., March 27, 2022. REUTERS/Danny Moloshok

Kim Kardashian's billion-dollar empire

Kardashian, who has an estimated net worth of $1.8 billion, joined Forbes' coveted billionaire list last year with the outlet citing KKW Beauty and Skims as catalysts for her billionaire status, in addition to extra cash from her former reality series "Keeping up with the Kardashians" and endorsement deals.

The 41-year-old started KKW Beauty in 2017 and owns 72% of the company (equivalent to about $500 million, according to Forbes). Additionally, she sold a 20% stake of that company in 2020 to beauty conglomerate COTY (COTY), which amounted to $200 million in cash.

Meanwhile, Skims saw a boom in sales amid the pandemic, as consumers gravitated toward comfier, at-home clothing options. Kardashian owns a majority stake, and while the financials of the company have not been disclosed, Forbes reported the brand raised $240 million in its latest funding round in January at a valuation of $3.2 billion.

The rest of the star's wealth sits in investments, real estate, and cash. The recent debut of Hulu's "The Kardashians" should also continue to provide a steady and supplemental stream of income.

The famous family signed a multiyear deal with Hulu (DIS) at the end of 2020.

Alexandra is a Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com

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