According to my online version of the Globe and Mail, the ROB Magazine will be publishing an in-depth piece tomorrow regarding the trials of Kevin O’Leary’s mutual funds. I was interviewed for the article, despite having avoided most such calls over the years (including Time Magazine’s request of three years ago), but I won’t scoop the enterprising journos who wrote the piece. If you’re interested, you can buy the ROB magazine tomorrow as part of the G&M in most Canadian urban centres.
For those of you that are new to this space, we’ve been kicking around the “O’Leary” subject matter for over four years. But we certainly don’t have the standing nor research resources of the Globe. After a few years of plugging away, it is fair to say that it’s always confirmatory to have the MSM continue to dig into topics that we were first out of the gate on, time and time again. (Not that I need the MSM to tell me what makes for a good news story.)
Our coverage began so long ago that Mr. O’Leary was using the name Gencap Funds for his portfolio management firm (try www.gencapfunds.com), which was quite similar to the U.S. equity firm Genstar Capital that Mr. O’Leary had a relationship with at the time. I’ve always assumed that perhaps even KO didn’t want to lend his family name to the initiative until he knew it was going to succeed at selling retail investment products. Once retail brokers started to recommend his stuff, the O’Leary Funds name was out in force, and Mr. O’Leary went on to collect assets faster than anyone I’ve seen in recent Canadian asset management history (see prior post “Kevin O’Leary is a rock star” June 30-08).
To save you the hassle of searching the web, here are some of the highlights from our coverage dating back to 2008:
O’Leary Fund promises to share the wealth and wisdom
May 8, 2008
This was the epic piece the predicted the O’Leary Global Equity investment strategy couldn’t achieve its marketing hype.
O’Leary ditches the “Get Paid While You Wait” cliche
June 1, 2008
I enjoy this one ’cause someone seemingly forced Mr. O’Leary to drop the “Get Paid While You Wait” phrase from the final prospectus of the O’Leary Global Equity Income Fund (his first public investment vehicle). Undaunted, Mr. O’Leary was so taken with the cliche he wound up getting a trademark on a line that’s been around for decades.
O’Leary talks up his own book
July 31, 2008
I was watching BNN one day and on came Mr. O’Leary to talk about his then TSX-listed O’Leary Equity Income Fund. Retail investors, who hadn’t got their fill on the $12 IPO offering, ran the price up to $14.17 after the TV appearance. Less than four months later, the Unit NAV was below $8/unit.
O’Leary Global Equity Income Fund correlates perfectly with the DJ 30
November 14, 2008
Despite being marketed as a “conservative” investment vehicle with proprietary investment ideas (including private companies), it turned out that O’Leary’s Global Equity Income Fund was performing almost the same as if you’d put your hard earned savings into the Dow Jones 30 index: a 97% correlation in fact. Who needed to pay a Dragon money manager?
O’Leary “Global” Equity fund loads up on old Canadian favourites
Feb. 13, 2009
As you might imagine, I got a kick out of the fact the top 6 equity holdings of the O’Leary’s “Global” equity fund were actually Canadian companies, despite promising in the IPO Prospectus that his concentraion in Canada/USA securities wouldn’t exceed 35% combined.
Portfolio churn an early hallmark of O’Leary’s Global Equity Income Fund
To my surprise, 17 of the top 25 O’Leary Global Equity Income Fund holdings as at September 30, 2008 were not on the map as of December 31st; hard to collect dividends if you’re churning the book, I thought.
High MER a surprise at O’Leary’s OGE Fund
April 16, 2009
Given Mr. O’Leary’s public pronouncements about the high fees charged by mutual fund managers, it was “interesting” to discover that his MER was 3.52% during the Global Equity Income Fund’s first year. If you can’t beat ‘em, join ‘em? This was when I also came across the incredibly high portfolio turnover rate of 253.95%.
What is the origin of O’Leary’s “billionaire” moniker?
January 24, 2010
For a guy who made “only” ~US$11.1 million from the US$3.6 billion sale of The Learning Company to Mattel in 1999 (including his severance, according to The New York Times), it seemed like a good question to pose.
Even Shark Tankers are confused
Feb 11, 2010
For some unknown reason, Mr. O’Leary’s own Shark Tank co-hosts also think he’s a “billionaire”.
O’Leary: “We have never dipped into the principal”
June 7, 2011
I couldn’t help but check the veracity of Mr. O’Leary’s statement to The Toronto Star that O’Leary Funds “never” dipped into principal to pay out distributions to his investors; as in, paying people with their own original capital.
Some “Cold Hard Truth”
Sept. 29, 2011
Mr. O’Leary’s interview about his bestselling book had a few things needing clarification, in my opinion.
O’Leary fact watch: a 1990 Latour trades for $5,000?
Oct. 17, 2011
This is one of my personal favs (also see prior post “Attn KO: Latour bargain on the horizon” Jan 16-12). O’Leary told an entertainment reporter than one of his bottles of wine was “trading for” $5,000, even though there were cases upon cases of the label available around the world for less than a grand per bottle. Video clip, too.
Decade of Daddy Mirror Fund Annual Report #4
When Mr. O’Leary launched his first fund, I thought it was worth building my own dividend and income fund, posting it on the blog, and seeing how I did compared to his Global Equity Income Fund’s investment choices. I called it the Decade of Daddy Mirror Fund, in honour of KO’s 2007 declaration that he was in his own “Decade of Daddy”. Since I’m not some brilliant stock picker, nor a licenced retail investment advisor, this was a dangerous move. Fortunately, I stuck with largely simple investments like pipelines, banks, and drug companies and put them under the proverbial mattress. With four years under our belts, the Decade of Daddy Mirror Fund was up 46% at last check (see prior post “Decade of Daddy Mirror Fund Annual Report #4“), while KO’s O’Leary Global Equity Income Fund appeared to have broken even before coverting to a mutual fund in March 2012. During the same timeframe post-launch (which was Canada Day 2008), the Dow was up 13.2% and the S&P 500 had risen 7.3% (pre dividend re-investment). In essence, investors would have done substantially better had they just bought the index.
One last thought before you go: for fear that you think I might fall into Sylvia Stead’s category of “obsessive” or “single-minded” blogger, of the 2,313 things that have beeen posted here over the past 6+ years, only 59 blogs had the word “O’Leary” in them. Just over 2%.
Whenever people ask me what I have against him, I always say the same thing: “nothing at all”. Mr. O’Leary is a fabulous television personality. But unlike Eric Sprott, Gerry Schwartz and Ira Gluskin, for example, he never published his own investment IRRs when he went out to raise capital from investors. In my opinion, it was simply: trust me, I’m on TV, I built The Learning Company and sold it to Mattel for US$3.6 billion in 1999 (around the peak of the NASDAQ bubble), and I know how to make you money investing in public companies. I was dubious about that pitch back in early 2008, and have followed the story to its pending and unavoidable conclusion.
As KO might say himself on CBC’s Dragon’s Den, it’s all about results. And the results speak for themselves.
(disclosure: this post, like all blogs, is an Opinion Piece)