A brief look: Elevation's Facebook investment is the sweetest thing
- Theresa Mallinson
- 18 Aug 2011 (South Africa)
Investment fund Elevation Partners, best known for its connection with U2 frontman Bono, is finally shaking off its loser reputation. Before you ask what a rock star knows about financial markets, consider that Elevation's 2009 investment in Facebook has grown fourfold. As if Bono weren't rich enough already. By THERESA MALLINSON.
In-between touring the world with his band, avoiding paying his taxes, and saving Africa, U2 frontman Bono somehow managed to find the time to cofound an investment company, Elevation Partners, in 2004.
Until now, the company has been widely panned for a string of poor investment choices, including buying a 25% stake in Palm in 2007 for $325 million (admittedly Elevation was able to exit the investment with a slight profit when Hewlett Packard bought Palm last year), and a 40%-plus stake in Forbes Media that is rumoured to have cost between $250 million and $300 million. The media company has fallen far short of projected earnings since then [http://finance.fortune.cnn.com/tag/forbes-media/], even going into the red for the 2009 financial year.
U2 is doing a lot better than Forbes Media at the moment as, ironically enough, the band retained the top spot on the Forbes Music Rich List 2011, with earnings of $195 million last year, largely from its 360 World Tour.
Seems like Bono's investment prowess was his Achilles heel, with Wall Street 24/7 calling him “the worst investor in America” in March 2010. But, with Facebook's recent valuation of $65 billion, the U2 frontman's financial reputation – and bank balance – look set to improve dramatically.
Elevation paid $210 million for about 1% of Facebook in November 2009. Today, that stock is worth $975 million, which means its value has grown more than four times in less than two years.
While some headlines have referred to “Billion-dollar Bono”, it's worth remembering that he is just one of five partners in Elevation. So that putative billion dollars doesn't belong directly to Bono, although he owns a significant share of it. We wonder how many starving Somalis that money could feed? DM
Join the counter-revolutionary expansion movement. iMaverick.
- Billion-dollar Bono: U2 star is now elevated to top investor, in the Belfast Telegraph;
- Bono's Facebook stake worth nearly $1bn, in the Guardian.
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