Thursday, June 19, 2008

What's Up in the Investment World

Hedge While You Play, Profit From Porn, Sex Toys

Peter Lynch, the famed investor and vice chairman of Fidelity Investments, often advised to ``invest in what you know.''

Maybe that's why Francis Koenig thinks Wall Street is ready to come around to putting big money into the adult-entertainment business.

Koenig is chief executive officer and founder of AdultVest Inc., ``the world's first and only investment community designed specifically for the adult industry,'' according to the company's Web site.

AdultVest matches buyers with sellers of strip clubs and other businesses; offers a forum for ``talent'' to be bought and sold in the adult industry; and seeks out investors to pony up money for hedge funds that invest in clubs, adult-toy companies, porn-movie producers and other legal players in the sex business. It is the latter -- the hedge funds -- that is the ``primary focus'' of AdultVest, Koenig said in a telephone interview.

Primary, perhaps, but not quantifiable for anyone trying to determine how much cash has come AdultVest's way. Koenig won't say how much money is under management, allowing only that it's a ``small group'' of institutional investors -- fewer than 20 -- in his Bacchus Investment Fund (minimum ante: $1 million) including one pension fund that he declined to name.

His second fund, the Priapus Investment Fund, has lured enough smaller investors expending a $100,000 minimum that Priapus was able to purchase the domain name iPorn.com, which Koenig calls ``the crown jewel of the portfolio.'' Priapus also owns shares of strip-club operator VCG Holding Corp.

Comparable Deals

Koenig won't say what the price was for iPorn.com, which consisted of the domain name only and no content. But he does hint that a similar domain name -- porn.com -- fetched $9.5 million in March 2007.

His investors may all be anonymous; his business may be sordid and the amount of actual money he's managing may be a mystery. None of that will keep Koenig from being among the luminaries honored at New York's Cipriani Wall Street on June 25, where Michael Steinhardt and other hedge-fund icons will gather for the black-tie Sixth Annual Hedge Fund Industry Awards sponsored by Total Alternatives (formerly Alternative Investment News). AdultVest is among four nominees for the ``Hedge Fund Launch of the Year'' award.

Last year, the award went to KKR & Co., formerly Kohlberg Kravis Roberts & Co.
Koenig says he thinks that investors ``have gotten over the moral issues'' related to adult investing.

VCG Owners

There may be something to that. The New York State Common Retirement Fund, the California Public Employees Retirement System, or Calpers, and the Commonwealth of Pennsylvania Public Schools all disclosed in Securities and Exchange Commission filings that they owned VCG shares. That should go over big with the kindergarten teachers and school social workers in the Keystone State.

Money managers JLF Asset Management LLC, Burlingame Asset Management and Slater Capital Management LLC also held stakes in VCG as well as strip-club operator Rick's Cabaret International Inc., according to SEC filings.

Rick's is a particular favorite of the Wall Street crowd, catering to multitasking financial types who stop in for a quick lap dance by making sure there's always a TV screen tuned in to CNBC.

Little Fetish Fairy

Still, considering the company AdultVest keeps, it should come as no surprise that Koenig's is a venture that gives many investors the creeps. When AdultVest appeared at the Erotica LA trade show June 6-8, its co-exhibitors included Little Fetish Fairy, a seller of provocative women's clothing; Desire Resort & Spa, a nudist resort; and, proving that this is the ultimate open-minded crowd, Escorts for the Disabled. Visitors to the show could attend seminars such as ``Sex Toys for Beginners'' and ``Pole Dancing for Fun and Fitness.''

Paul Fishbein, publisher of AVN Media Network, which runs adult trade shows and publishes magazines about porn and other adult businesses, said that for AdultVest to succeed, it will need ``big-name acquisitions,'' including a content producer, an Internet outlet, and a big player in the sex-toy business. AdultVest is an AVN client.

At AdultVest, Koenig is feeling good -- that's the idea, after all -- about his crown jewel, iPorn. He's offering free membership for customers who sign up for a ``pre-launch'' test before he unveils the Web site later this year.

``Twenty percent of our traffic is from iPhones,'' he gushes of the initial response, adding that iPhone users can download the iPorn icon ``right on the phone so that you can access your iPorn any time you're on the go.'' Porn watchers can even ``carry it with them and watch on an airplane.''

3 Comments:

Blogger Torrance Stephens bka All-Mi-T said...

i got vice fund stocks, im not stupid

12:40 AM  
Blogger no_slappz said...

This comment has been removed by the author.

10:12 AM  
Blogger no_slappz said...

torrance,

Good.

One of the more interesting stocks in the vice category is Rick's Cabaret -- stock symbol RICK -- which is a restaurant/strip joint whorehouse that operates in several cities including NY City. I don't recall if there is a Rick's in Atlanta.

It was mentioned in the original post.

I'm not recommending the stock, but it did go up a lot over the last year and a half.

10:16 AM  

Post a Comment

<< Home