Where do the celebrities invest their money?
Where do the stars put their money? It’s an interesting question, if only because they may know something we don’t, or have access to interesting investment opportunities the rest of us don’t hear about. Here are five celebrities who have an investment tale to tell:
Newly crowned world tennis number one – and the three time BBC Sports Personality of the Year – Andy Murray has an interesting side line in investment. He’s bought into a string of small start-up businesses through an association with Seedrs, the online crowdfunding platform. His holdings include stakes in Perkbox, a leading supplier of perks and benefits schemes to employers, and WeSwap, the peer-to-peer travel money platform.
U2 frontman Bono is best known for his band and his broader political and philanthropic activities, but he also has an impressive investment pedigree. He’s a founding partner of Elevation Partners, a private equity firm that focuses on investments in new media and technology businesses. The firm has had a string of notable investment successes but is best-known for an $86m stake in Facebook that was worth $1.4bn when the social media network floated in 2015. The deal reportedly netted Bono himself $43m.
Madonna’s longstanding interest in the health and well-being sector has made her a natural target for businesses in this industry looking to raise money. Six years ago, the pop star took up one of those invitations, investing $1.5m in Vita Coco, the manufacturer of the eponymous coconut water drink. Actors Demi Moore and Matthew McConaughey are also backers of the company. Madonna’s investment proved doubly useful to Vita Coco – not only was the capital vital to its growth, but also, news of her interest sent sales soaring by as much as 168 per cent in the two years after she took the plunge.
Justin Bieber hasn’t always enjoyed the best reputation, but the maturity of his approach to investment is impressive – the young Canadian pop star has backed a series of successful companies, taking stakes in big winners such as the music-streaming service Spotify. He’s currently doing his best to raise the profile of Shots, an app that allows users to share selfie photos – the business has raised millions of dollars in funding, including money from Bieber himself, and has benefitted from the publicity he gives it.
Boxer David Haye is an early-stage investor in the recruitment company Syft, which uses a phone-based app to connect companies looking for staff with suitable candidates, particularly in the hospitality industry. Haye put some of the money up in a £2.65m funding round completed by the company last year and says that backing British entrepreneurs in the technology industry has become a passion for him.
So what can we learn from these celebrities? Well, one thing to note is that many have chosen to invest in businesses that are involved in activities they know and care about. That gives them a head start when thinking about whether the investment stacks up. These celebrities are also prepared to take a long-term view, often backing companies at an early stage, which require patience. They also use their reputations to boost the profiles of the businesses they back.
On the other hand, most of these investments look relatively risky. We don’t know what other, less volatile, assets the celebrities hold, but this sort of holding certainly won’t appeal to people without sufficient wealth to diversify their portfolios.