The Jay-Z Index: How To Invest Like Hov
Many of the billionaire's businesses are now tied to publicly-traded companies—meaning it's possible for anyone with a brokerage account to mimic Jay-Z's portfolio.
Jay-Z may well go down in history as the greatest rapper of all time, but his bona fides are pretty strong as a personal finance guru, too. Whether it’s his recommendation to avoid leases and instead “buy the whole car” on his debut Reasonable Doubt or his exhortations to build credit on his more recent 4:44—an album in which he says he’s offering “$1 million worth of game for $9.99”—his three-decade oeuvre is peppered front-to-back with excellent monetary advice.
With a net worth well north of $2 billion, Jay-Z is hip-hop’s wealthiest mogul, having made the bulk of his fortune by starting his own private companies and turning them into giants. But many of his ventures now are tied to publicly-traded conglomerates, which means his portfolio can be mimicked—not perfectly, of course, but with a reasonable degree of accuracy—by any investor with a brokerage account.
So today, I’m going to sketch a blueprint, if you will, of Jay-Z’s portfolio—using publicly-traded securities. I should note that this is not a solicitation to buy or sell anything, nor do I have any sort of financial relationship to any of the companies discussed below. Investing, of course, involves the risk of loss. And though envisioning this Jay-Z Index is by no means a carbon copy of his holdings, I believe it’s an enjoyable and instructive exercise—like putting together a lego model of the Empire State Building.
I used to do this sort of thing all the time earlier in my career, when I was a money and investing reporter at Forbes—often writing stories about clever wealth managers and attempting to translate their strategies into actionable advice for retail investors. And since I quite literally wrote the book on Jay-Z, I figured I ought to finally apply the same approach with Hov.
Of course, one thing that sets Jay-Z apart from most investors is that he makes companies more valuable simply by having his name associated with them, just as Warren Buffett causes shares of Coca-Cola to rise when he announces he’s buying more. Still, these legendary investors do tend to buy for the long haul, and those who’ve followed Buffett’s lead have done very well for themselves.
So, without further ado, I present the Jay-Z Index. Below, you’ll find eleven categories along with the approximate percentage weight they hold in the Jay-Z Index, each followed by a representative publicly-traded security. As an added twist, I’ve created a Google Finance watch list to track Jay-Z Index returns. We’ll revisit this in the future to see how Jay-Z fares against the S&P 500 and other benchmarks. And away we go, starting with the smallest stakes.
Luxury Vehicles, 2% — Rolls Royce Holdings PLC (OTC: RYCEY)
Jay-Z has name-dropped all sorts of automobile brands over the course of his career, and after starting out with his “off-white Lexus,” his vehicular portfolio has expanded considerably, culminating with rumors of an eight-figure purchase of the rare Rolls Royce Boat Tail convertible and a Bombardier Challenger 850. There are plenty of luxury car companies on the public markets, but Rolls Royce seems like the closest representation here, in part because it also manufactures jet engines.
Ride-sharing, 2% — Uber Technologies Inc (NYSE: UBER)
Way back in the day, when Uber was still focused on black cars, Jay-Z invested $2 million in the fledgling startup. He actually attempted to wire an additional $3 million, but the funds were returned, as founder Travis Kalanick wanted to hang onto as many shares as he could. Jay-Z kept his shares, too, and by the time the company went public in 2019, their value had soared to about $70 million—tipping him into billionaire territory. We don’t know for sure if Jay-Z still owns those shares, but given the company’s role in growing his wealth over time, a small allocation seems about right.
Venture Capital, 5% — SoftBank Group Corp (OTC: SFTBY)
Perhaps partly because of his success with Uber, Jay-Z has been spending an increasing amount of time focused startup investing. In addition to an impressive angel portfolio, he also launched his own fund, Marcy Venture Partners, which has raised hundreds of millions of dollars and has backed successful companies like Savage X Fenty. Venture capital is—by nature—a private and rather opaque industry, so it’s tough to estimate the value and weight of Jay-Z’s holdings here with much precision. But we can make an educated guess, and SoftBank serves as a decent proxy, thanks to its $100 billion Vision Fund, likely the world’s largest tech-focused venture fund.
Premium Real Estate, 6% — Empire State Realty Trust Inc (NYSE: ESRT)
Jay-Z and Beyoncé own several very fancy properties, including a Tribeca triplex and a Hamptons home each valued in the low-to-mid eight figures, a Bel Air estate they bought for $88 million, and a recently-acquired $200 million Malibu spread—the most expensive residential real estate deal in California history. To be sure, there’s no way to completely capture that tiny slice at the top of the high-end market. But the real estate investment trust (REIT) that owns the Empire State Building happens to be publicly traded. Yes, it’ s commercial real estate, which has plenty of problems in the work-from-home world. But this one is about as Jay-Z as it gets.
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