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- Michael Brown, a business manager who advises ultrarich Hollywood celebrities and professional athletes, says his clients are hungry for chances to invest in plant-based burger makers.
- Brown says the industry is gaining a buzz that reminds him of the rapidly-growing cannabis business, which also remains an in-demand area for investment.
- Brown, a partner at Roger A. Brown & Co., also says he’s also seeing a lot of demand for municipal bonds, but he has doubts about investing in the federal government’s "Opportunity Zones" program.
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Even before Beyond Meat’s initial public offering went stratospheric, Michael Brown’s clients were clamoring for a seat at the vegan meat table.
Brown is a business manager for a wide range of millionaires and billionaires. His roster features Hollywood actors, directors, and producers, as well as professional athletes. He told Business Insider his clients have invested $5 million in Beyond Meat’s competitors over the last year in chunks of up to $500,000 — and he predicts they’ll have a lot of company in the coming years.
"I think the next big thing is going to be finding alternatives for food," he said, comparing it to the currently dominant trend of cannabis and CBD-themed investments. "A lot of celebrities are looking for these alternatives. I think that’s going to be a huge growth area."
Brown advises clients who range from their teen years to their 90s. His eldest client is his grandfather, Roger A. Brown, the founder of the namesake firm where he’s now a partner.
Michael Brown / Roger A. Brown & Co.
Those investments, for now, aren’t in Beyond Meat itself. Brown says he’s avoiding the stock after its stunning market debut, which has seen the stock soar as much as 242% in its first week of trading. Beyond Meat already has one major rival in Impossible Foods, and major meat producers are working on their own plant-based products.
But there are other options in the private market, and Brown has become something of an old pro at evaluating them. Whether he’s looking at a plant-based meat company or a cannabis company, he says he looks for many of the same qualities.
"I look to who’s got experience in the industry (and) who’s got the distribution partners, because you can have the greatest product in the world, but if there’s no way to distribute it and market it, it’s going to go nowhere," he said. "There’s tons of great ideas out there, but the game plan on how to achieve that is really what I focus on."
Brown adds that when he’s advising a client about a potential investment in either industry, everything from its supply chain capabilities to distribution to its in-store shelf placement matters, because those things will influence the business’s chance of success.
That’s important because there are so many companies already in the legal pot business — and the situation might soon be the same in vegan meat.
"There is a big market opportunity in both of those areas," he said. "There’s a lot of market participants right now."
Despite the buzz, Brown says that plant-based meat and CBD aren’t the main place he tells clients to put their money. His top choice for them is real estate, and he’s recommending an asset that’s grown more and more popular lately: municipal bonds, which can help his client reduce their tax bills.
"Those California municipal bonds are very powerful tools, especially when you think the market is pretty hot," he said.
But Brown is far less optimistic about so-called Opportunity Zones, an option created by the 2017 Tax Cuts and Jobs Act. Under one provision of the law, an investor who sells an asset and can potentially get a tax break if they reinvest the profits in an economically depressed area in the next 180 days.
"Every investment advisor is doing it right now," he said.
See Also:
- A top-rated wealth manager for pro athletes reveals the mistakes newly minted millionaires often make — and explains how he helps them avoid those pitfalls
- This wealth manager for celebrities says the young people who ask her for investing advice are often making a basic financial error
- The stock-investing chief overseeing $235 billion at Charles Schwab breaks down his surprisingly bullish call on the market’s least favorite sector
Source: Business Insider – mjay@businessinsider.com (Marley Jay)