- Johnson’s JLC Loop Capital Partners raised $1.3 bln in 2016
- NBA great is president and CEO of Magic Johnson Enterprises
- Was on 5 Lakers championships; retired in 1991
Since Earvin “Magic” Johnson left basketball, his biggest challenge has been gaining acceptance from institutional capital.
Johnson, a force on five championship teams with the National Basketball Association’s Los Angeles Lakers, told a dealmaker-packed room at ACG’s InterGrowth that California Public Employees’ Retirement System rejected him five times before it agreed to partner with him.
Success with CalPERS came in 1996. The pension plan and Johnson formed a $51.5 million partnership, California Urban Investment Partners, which invested in minority neighborhoods in Los Angeles, San Francisco, Oakland and other California cities, according to press reports. CalPERS provided $50 million, reports said.
Johnson, who spoke during a keynote presentation Tuesday in Las Vegas, has several active ventures and in February was named president of the Lakers’ basketball operations.
Asked whether he loves investing or basketball more, he declined to say. “I’ve now taken on the role of running the Lakers,” Johnson said. “My life has changed a lot. My main focus right now is to get the Lakers back on track.”
He has an infrastructure firm called JLC Loop Capital Partners and is president and CEO of Magic Johnson Enterprises, which is reportedly valued at more than $1 billion. (Johnson’s personal net worth is estimated at $600 million, celebritynetworth.com reported.)
Johnson said he targets undervalued businesses; companies should be “profitable already and sustainable.” Current holdings include ShotTracker, mitu, Walker & Co, the Marvel Experience and the Los Angeles Sparks of the Women’s National Basketball Association. Johnson was also part of the investor group that acquired Major League Baseball’s Los Angeles Dodgers in 2012 for $2.15 billion.
Johnson said he “always looks and sees what the big VCs are doing.” He said he loves being in the tech space although he said he has yet to invest in a late-stage tech company. “I’m looking for double-digit returns,” he said.
Johnson’s $1.3 billion infrastructure pool will invest in urban America, he said at InterGrowth. The fund is developing a terminal at the new Denver airport, MarketWatch reported. The pool has landed another project in NYC. The basketball great didn’t disclose any specifics. “I will be working with women-owned and minority-owned businesses,” he said.
Johnson, who retired from the NBA in 1991, discussed his investment experiences as he mingled with InterGrowth audience members and took several selfies. At six feet nine inches, the former Lakers point guard didn’t mind poking fun at his height. One ACG executive even stood on a chair to take a photo with Johnson as the InterGrowth audience laughed.
One of his most memorable deals was Starbucks. Johnson said he told Howard Schultz, then the coffee-bar chain’s CEO, that “minorities drink coffee, too.” In 1998, Johnson Development Corp, a division of Magic Johnson Enterprises, entered a 50-50 partnership to develop Starbucks stores in underserved neighborhoods.
He built more than 100 Starbucks stores in areas including Harlem in New York, the Crenshaw district in Los Angeles and the Bronzeville neighborhood in Chicago. In 2010, Johnson sold his stake in Starbucks back to the company. “He wrote me a big, big check,” Johnson said at InterGrowth.
There is a deal he won’t do. Johnson said he was asked to invest in the Golden State Warriors. “But I said no. I’m a Laker. [The Warriors] look awful good right now.”
Action Item: Email Magic Johnson at email@example.com
Photo of Magic Johnson at InterGrowth courtesy of ACG