Reality TV Star Kim Kardashian on The David Rubenstein Show: Peer-to-Peer Conversations

This is my kitchen table and also my filing system. Over much of the past three decades I've been an investor. The highest calling of mankind I've often thought was private equity. And then I started interviewing. I watch your interview because I know how to do it. I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted. He said 250. I said fine. I didn't negotiate with him. I did no due diligence. I have something I'd like to sell and how they stay there. You don't feel inadequate now because being only the second wealthiest man in the world. Is that right. One of the most recognized names and faces in the world today is Kim Kardashian. She has more than three hundred and sixty five million Instagram followers. I don't have any Instagram followers. Recently she decided to get into my business the private equity business. And it's starting a private equity fund with one of my former partners Jay Samets. I had a chance at a private equity conference in Berlin to interview both Jay and Kim about their private equity fund. I also had a chance to interview Kim Kardashian alone before the conference began. I've often said that private equity is the highest calling of mankind. Why did it take you so long to realize that and that to join the private equity world. I finally got talked into it once I came to that realization. I have had a long standing relationship with Jay who came from the Carlyle group and I was pretty close to doing a few deals with Jay when he was at the Carlyle group. So for about 10 years we had conversations whether it was through something we were going to do or people close to us were going to do. And I was privy to all of those conversations. So we finally you know had the conversation that we should really get into business together. It's been a fascinating process. So the name of your firm is Sky Partners. Sky is usually spelled s k y. Yours is s k k y. How did you come up with that name. We had to have a little bit of influence. I thought you know Jay Sammons. I thought that the S for Sammons and KK Kim Kardashian worked out. So you've now been exposed to the private equity world for a little bit of time. You've met investors here and around the world. What is your view of the private equity investment community. The most honest people you ever met. Very very nice people. I actually have been introduced to the world. A lot of my friends growing up they are in this space now. So I'm on a group chat where I'm being asked all the time about different companies and businesses mostly tech that they invest in if they're really good companies. And I've even gotten on you know Zooms with all of the founders to hear that their pitches on their on their businesses as if I work with them already. So I felt like it would be a really good next step to do it together. So Jay how did you two of you first meet and how did you get in the private equity and why did you specialize in consumer. Well I started. First of all David thanks for having us and for being here with us. I started my investing career about 23 years ago and I had the privilege of spending almost the last 17 years working for you. As you know I actually did not start investing in consumer businesses until I started at Carlisle. But obviously you spent the entirety of my time at Carlisle doing that. And in particular I spent all of my time trying to back great disruptive high growth consumer brands. And I have a passion for that. I believe it's the best place to invest in consumer. And the experiences that I had at Carlisle as I said are putting us in a position to build something really special. So you also have a clothing company which is called Skims right. And you have a skin care beauty products company skin skin by Kim. OK. All right. All right. Did you need a lot of help coming up with that name. Probably not. OK. So that's two businesses is pretty big. Those are big businesses. Why did you think you had the time. You have four children to do another business in the private equity world. How much time you really have for something like this. I felt I feel like in life. You have to do things that challenge you and help you grow and evolve. And this is a space that after spending a lot of time with Jay and with the knowledge that I've learned starting businesses taking investments from firms and people that I've learned so much about and having great relationships and also being on the other side seeing relationships not work out if you don't partner with the right investment person and team. And I really felt like we could. Set ourselves apart by me really. Being that person that has been the founder that believes in the founder that wants to really help that company grow and thrive and really support them because I've been there and seen relationships work and not work. And it was just something that I was really interested in that I was willing to cut back on other things. OK. And so when you ask people to do meetings do they say no or is it that hard to get a meeting or probably with investors or not that hard. So the answer is no. And I'm and I'm grateful for that. And it's largely because you know I believe that what Kim and I are building is is unlike anything else that's being built in this space. And it's a very intentional combination of two really complementary skill sets that that other firms don't have. So right now the private equity world is tough to get financing for deals and so forth. So are you going to be doing buyouts which require financing or are you going to do growth capital deals which presumably don't need as much financing or any. Yeah our our strategy is actually really consistent again with what I've done in the past which was very unreliant on leverage in the consumer growth world. It's about great asset selection and great execution on value creation plans. It's not about the marginal amount of leverage that will drive a few basis points of incremental return. So in some instances when the companies can support it we'll use a little bit. But in most instances we won't. It's all about just getting behind the right ideas. OK. So when a deal comes along how do you have an investment committee. I presume you're on the investment committee and and so is it a one person veto. If you don't like the deal it's not going to get done or if you don't like the deal it's not going to get done. How does that work. Well so far we haven't really run into that issue. We both I think respect each other's opinion and trust each other. I think culturally we have the same vision of what brands we think can grow and that we can really help make an impact. But we also both really believe that our team being included in these decisions is really important and we want everyone on our team to have a voice. What is it that you're most looking forward to about private equity. Is it coming to conferences like this. Is that what you're most looking forward to. Absolutely. I'm honestly most looking forward to my relationships with the founders. I'm really fascinated to hear their backstory. I'm a storyteller. I I'm so excited just to have the opportunity to help them win. And I love hearing people's stories and hearing what their magic sauce is behind their their company and why they wanted to start the company that they did and what their vision is and just hope that I can help that. I've always felt the doubt and I've always just taken that as motivation to have me focus more and work harder and felt like I had more to prove. So you can be called one of the first influencers or maybe the first of the influencers. Did you know what an influencer was really going to lead to when you first became an influencer. No I really didn't. I knew that social media was really interesting in a way where I personally when I got on used it as like a free focus group when I had questions about when I was launching my first product ever which was a fragrance and I needed opinions. And I went to Twitter. I remember Twitter was like the first real platform besides my space which at that time an influencer wasn't even in the mindset. Same with Twitter really for a while. It was more of I think a way to communicate with a fan base. But I did use it as like a free focus group that I thought was fascinating and I I felt like the customer became more invested in the fragrance that I was launching because they felt like they were a part of it. And I just thought that was really interesting. And I didn't quite at that time though realize what a tool social media would be for business. Now you've built several businesses. When you were building them people would say well she can't really build a fragrance business or she can't really build a clothing business because she doesn't have a background in that. But they turn out to be extremely successful. So did people not thinking you could do it urge you to make it even more successful or were you nervous that maybe they were right and you couldn't build those businesses or how did you feel about when you were building these businesses from scratch. I definitely always took the doubt as motivation. I always felt like and still do always feel a bit insecure about it. Confident in the brand. I love creating a brand and launching a brand and the whole process of it. I always have those I think healthy nerves when you're launching something especially on a launch day or a product launch day. But I've always felt a little bit. I've always felt the doubt and I've always just taken that as motivation to have me focus more and work harder and felt like I had more to prove. So nobody can build a business or run a business by themselves. So you have to hire people and get people around you from time to time for your businesses. How do you select who you want to hire and you ever have to hire anybody and say well you were good but not quite good enough. Yes I have a great team and a small team and the fires firing is really difficult for me. So I always have someone else do it. It's really really hard for me unless it's someone that works in my household and I have a personal relationship with them. Obviously I would give them the respect to do that. But I have a small team. When I started my beauty business when we started skims my business everything that I do starts with a really selective in-house team even from my business manager. Everyone is just someone that I've taken a lot of time to get to know. I trust and a good community relationship within my office and within my house staff everywhere is the most important thing. And you test all the products yourself. In other words you always test it. Oh everything. Yes. Yes. I'm so hands on. I'm so involved. I mean to this day for skims I'm still our fit model which we have like a group of fit models and I'll know the collection that I didn't fit for. I'm very specific on how things fit. And I make I pick the fabrics that come up with all the marketing. So with with skims and my beauty brand skin I do every last thing from packaging design to helping with the fonts and the you know every campaign every photographer we pick every formula of every product. I mean I have to be involved 100 percent. So many people would say in one family you probably can't have too many talented business people in your family. You seem to have a lot of talented business people. So is there a competition between you and your sisters or you're so friendly there's no competition. You know even like Kylie and I are both in the beauty business and we don't compete. We feel like we have two totally different brands and two totally different demographics. So I would say we don't really compete in that way. If anything we would motivate each other. And even we work on everything really privately and don't really communicate with each other about you know what we're launching and what our campaigns look like. I mean if we're really excited about something we'll share the process. But it's really rare that we do that now. And we don't really compete like that. I think we all just really focus and do our own thing. So your mother has been involved with your career as well. And your mother is involved I guess with your sister's careers as well. So is she a superstar business manager or empresario or how did she manage to keep all the children happy and have them each have their own career and own businesses and still be so close to them. She's definitely the smartest woman I know. And it really started first. She was a housewife when she was married to my dad and she raised the four of us. And then when she married my stepdad she became his agent and manager and got her agent license and figured it out and really helped that. And then it bled into wanting to help her children when the time was right and when our career started. So I ask her all the time how she manages six kids. And we all have very similar lives. But I find it really interesting that a lot of people call her to want to get her to be their manager. And she just like her heart is with her children. So I think it's a different kind of love and motivation. But she completely has helped us all figure it out. We come to her for every ounce of advice and she's really been so great at managing all of us. And but she's also really good at being the best mom. And even maybe a manager would push for one decision. She'll push for a mom decision first. So you were very close to your father who passed away at a very young age of cancer. He was a lawyer a well-known lawyer. Did that motivate you to want to go and become a lawyer yourself. Absolutely. I mean I think just seeing him every day he would get up be on his way to work drop us off at school see him go to work come home for dinner like we just I saw how hard he worked. And I saw just his work ethic that really drove me and especially his law studies I think really inspired me. We talked about it and he passed away when I was 22. So it was I was in college and we talked about my path in college and he was really realistic with me. Now, to be a lawyer in California, you don't have to go to law school. You can read the law, which is what people used to do many years ago. Abraham Lincoln never went to law school, and he did okay as a lawyer. So you're reading the law, and you've passed one of the bar exams, and you're going to take another one at some point in time. Is that right? Yeah. I think in about two years, I take the next one. So you need two bars in order to pass to become a lawyer. So I think now, since I've passed the first one, I could practice under someone, but to be a lawyer on my own, I have to pass the second bar. So constitutional law is kicking my butt right now, and that's what I'm studying currently. And it's extremely time-consuming, but so worth it. So as you've become so well-known, I think you have more Twitter followers than probably almost anybody in the world. Twitter followers, Instagram followers, you have something like 350 million Instagram followers. Is that the right number? Something like that? I think like 359. Something like that. 359 million. I have zero. I have no Instagram followers. I'm afraid to be on Instagram because I wouldn't have any followers, but you have 359 million. So when you go to a restaurant or you go out in the public anywhere, can you ever be not bothered by people who want to take your picture, want a selfie, want an autograph? How do you deal with all that? I think depending where you go, you really have to know where to go, and you definitely can get away with that sometimes, but you also have to understand when you're going out in public, that's just kind of, I guess, what comes along with the territory. I love to travel the world. If I go to Japan, no one will ask. Their culture is very different. Different places all over the world just have different, I think, beliefs and cultures where it's just not as important for them to ask for photos. So it's fun to travel and get away sometimes from that, but I also know that that kind of comes along with the territory as well. How do you convince your children that not every mother is as famous as you? Because they see people coming, calling you, you're very well known. How do you convince your children that not every mother is that way and therefore they have to live a life that may be a little bit different than the one you're living? Well, I think that they really do understand that every family is different. I mean, even within my sisters, you know, other sisters have different roles, snacks that they can eat, snacks we can eat, shows they can watch, you know. So we do talk about different families and different roles all the time. I think that they grew up seeing a lot and, you know, whether they were at their dad's, you know, big events or at filming, you know, with me and seeing stuff, I think they just have known and we've been really open and honest with them about our lives and how big it is and how different it is. And let's be positive and think of all of like the good positive things and just try to give them amazing experiences. But they are also so normal and well grounded that I'm so happy that they have a group of cousins that can all relate and that we all live in the same gated community and they ride bikes to each other's houses and scooters. I mean, they're the most normal, well adjusted kids and it just makes me so happy. And as a mom, you just feel like you're doing something right when your kids are happy. When you were growing up and you were a little girl the age of your children, could everybody pronounce the name Kardashian then? Because now it's a well-known name, but I imagine people said, pronounce it incorrectly then. Did you correct them or were you, was everybody pronouncing it correctly then? No, I remember then we, I would laugh with my dad about this during the O.J. trial when reporters would always say his name, they would always get it wrong and say different versions of it. And my dad told me a story that when the Armenians came over to America, they usually took off the IAN off their last name. So anyone with IAN, they're Armenian. And so, you know, our last name would be like Kardash, you know, and he just would always say, just never take the IAN off your last name. Like, it's OK if they mispronounce it. We would laugh all the time that no one can get our last name. And now it seems really simple. You and your mother and your sisters and your whole family became famous initially, I think, with a TV show called Keeping Up with the Kardashians, is that what it was called? Yes. So when you were first approached about that, did you roll your eyes and say, I don't want to do a reality TV show or you say, no, this is going to be great, we're going to be famous because of this? Or how did you get the idea or who came to you with the idea? And did all of you want to do it unanimously or all of you say maybe not? Yeah, well, when I remember so vividly being at my best friend's house, 1989, so I was nine years old and the show The Real World launched and I looked at my best friend and I said, that's it, I have I have to be on a reality show. And she said, I go, that's what I want to do when I grow up. And she said, OK, well, when we're 18, we'll make a audition tape for The Real World. And she goes, I don't want to be on, but I'll be your manager. And her dad's a manager. And we laugh now at our conversation then. And the show came about because Kathie Lee Gifford is one of my mom's closest friends. And when she'd come in town and stay with us, she would just laugh and say, you guys are a reality show. What you guys are talking about, fighting about how you guys live your life, this has to be a reality show. And we called Ryan Seacrest, got connected to him, met with the E! Network and our show was on the air. We started filming a week later. I think we were a filler show for a show that fell out of production and they needed something quickly. And we we just started filming. We thought we'd be on for maybe a season or two. And we did 20 seasons of Keeping Up with the Kardashians, 10 spinoffs. And now we're in filming season four of the Kardashians, which is basically the same thing, just on a streaming on Hulu. When I was nine years old, I wanted to be a major league baseball player. That didn't work out for me. But usually when you want something at nine, it doesn't usually work out. But I guess it worked out for you and your sister. I was determined they didn't want they didn't care and they didn't want to do it. But I talked them into it by saying that we had a clothing store and I said, you guys, this would be the best promotion for our clothing store. We should really consider this. And that got them hooked. Worked out. It did.