Is Ryan Reynolds Actually a Good Investor?

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With Mint Mobile, a low-cost prepaid phone provider, that Ryan Reynolds holds a 25% stake in, finally sealing the deal in their sale to T-Mobile, plus Kim Kardashian’s consumer PE fund struggling to raise financing, I wanted to take a deeper look into how celebrities and the investing world overlap.

Ryan Reynolds has an equity-oriented approach to advertising that has allowed him to participate in the upside for the companies he stars in commercials for. With Mint Mobile in particular, he’s starred as an owner of the carrier company that “stands up for the little guy”. Obviously, there’s volatility in the $$ he gets at the end of the day, but you don’t see Patrick Mahomes getting State Farm equity, Justin Herbert getting SoFi equity, and Justin Long didn’t get Apple equity from his “I’m a Mac” commercial series. If Reynolds can get it, then why shouldn’t celebrities demand equity upside?

Institutional capital may not be broadly open to some celebrities though. For example, Axios reported that Kardashian’s consumer-focused PE fund, SKKY has only raised $121mm in capital. This is a year after launching and is well below their goals of raising $1B-$2B. I’d argue she’s a skilled brand builder, selling a 20% stake in her beauty business for $200mm to Coty in 2021, as well as growing Skimms into a $4B business. But Kardashian may be struggling to raise financing due to LPs questioning Kardashian’s busy schedule and how exit valuations would be priced if Kardashian’s role in promoting a particular brand isn’t there following an exit.

Those are some real concerns about celebrity-driven brands - but how is Reynolds, on paper, doing so hot then?

I think the primary difference between Reynolds and Kardashian is that Kardashian is trying to win over institutional capital that won’t flock to her even if she has a track record of growing businesses from nothing.

Reynolds has been playing with house money, going the VC route, having other wealthy celebrities invest with him, or getting in the door by offering his “creative marketing” services. This seems like the right way to go about celebrity investing. At first glance, Reynolds seems to be the best example of how to build a creator/actor focused business and drive value.

I do of course have general skepticism with creator focused businesses, especially when it comes to financial disclosures. That general skepticism is what led me to do this deep dive on the Ryan Reynolds portfolio.

So let’s dig into his portfolio.

The Ryan Reynolds Portfolio Isn’t What You Think It Is…

In recent years, Ryan Reynolds has proven himself to be more than just the guy who plays Deadpool. Reynolds has ventured into the investing world and has had a surprising amount of success. At the surface level, he’s been ridiculously successful and is estimated to be worth $350mm.

However, this Newsletter DID NOT end up the way I expected. After taking a surface level view of Ryan Reynolds’ business ventures, there’s some obvious, robust homeruns. But when I rolled up my sleeves and went through SEC filings and old articles, the story became a lot more mixed. I was expecting to be praising him this entire newsletter, but this isn’t going to be the case at all.

Once you get past the noise, the surface level, and the normie-styled, not-entirely accurate content (like the article title below), you can find some ugly investments within the Reynolds portfolio.

This is bad because almost every finance news article calls Reynolds “Amazzzingggggg” - which detracts from his bad investments. But two things can be true at once: 1) Reynolds has some homeruns and he’s very, very wealthy and 2) Reynolds also has some ugly investments.

You’ll be surprised by these findings.