Kevin O'Leary closes failed mortgage startup
As retail investors continue to suffer via some of his lagging mutual funds, Kevin O’Leary’s brand took another hit last month when he agreed to “surrender” his mortgage licence to provincial regulators.
This came as a surprise, frankly, even to me.
It has been only 18 months since KO put his omnipresent profile behind this new business venture via YouTube. As you may recall, it took several years before investors began to flee his mutual funds in the wake of poor returns in several key asset classes (see prior post “O’Leary Funds appear to shed another 20% of assets in 2012” Jan. 27-13). Since the LCBO was able to market O’Leary-branded wine, it came as no shock that Team Kevin figured that Canadians would also buy a mortgage from KO. Apparently, they didn’t do their market research. As with the mutual fund caper, Canadians expect some value add.
But how did O’Leary’s mortgage entity fall flat on its face so quickly? First reported in Wealth Professional Magazine, there was no word whether the Ontario regulator shut the business down, or if KO merely got tired of losing money on the venture. Surely the Financial Services Commission of Ontario didn’t turn the lights out for him.
Whatever happened, my guess is that when regaling CNBC viewers about his alleged entrepreneurial genius and business savvy, he’ll leave out the parts about his shrinking money management firm and recently shuttered mortgage business. Perhaps these ventures will serve to make him a better mentor — of course, first he’ll have to admit to having failed at several of the businesses he’s been involved with over the past 15 years.
(disclosure: this post, like all blogs, is an Opinion Piece)