World's 100 Wealthiest Add $200 Billion as Global Markets Rise

Monday, 04 Nov 2013 08:27 PM

 

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This year’s top 100 billionaires own discount supermarkets and luxury brands, oil refineries and cement factories. They span the decades from millennial Mark Zuckerberg to 93-year-old Karl Albrecht.

This diverse bunch enjoys a unifying characteristic: Most spent the year making more money. Their collective fortunes have soared $200 billion to $2.1 trillion since Bloomberg Markets published its inaugural list in December 2012.

Veteran technology icon Bill Gates, 58, claimed the top spot. Microsoft Corp.’s chairman and co-founder bumped Carlos Slim, last year’s No. 1, to second richest. Gates’s net worth surged $10.2 billion to $72.9 billion. Slim, who controls America Movil SAB, Latin America’s biggest telecom company, saw his fortune crumble by 12.9 percent to $65.5 billion.

Denis O’Brien, founder of Digicel Group Ltd., falls shy of the top 100 list -- so far. Ireland’s richest native-born citizen, the subject of one of our five profiles of billionaires outside the top 100, has built his $5.4 billion telecom fortune chiefly by entering markets in the Caribbean.

Gambling Bet

Gambling proved a good bet for Asian billionaires. Philippine ports magnate Enrique Razon is taking on Galaxy Entertainment Group Ltd. founder Lui Che Woo, Hong Kong’s third- richest person, after Li Ka-shing and Lee Shau Kee. Razon opened Solaire Resort & Casino in March, the first of four gaming resorts set to rise along Manila Bay.

Siblings J.B. and Tony Pritzker, who got at least $2.7 billion following the acrimonious breakup of their family’s empire, are investing in private-equity and venture deals.

South African-born Kerr Neilson, who became rich managing other people’s money, set up a foundation to fund his wife, Judith, in her passion: giving wider exposure to contemporary Chinese art at her gallery.

Some of the more than 80 hidden billionaires Bloomberg News unearthed in 2013 through Sept. 30 also have family ties. Brothers Sergio and Pier Luigi Loro Piana, who head Italian cashmere clothier Loro Piana SpA, joined the billionaire ranks after agreeing in July to sell 80 percent of their company to No. 14 Bernard Arnault’s LVMH Moet Hennessy Louis Vuitton SA.

Batista Falls

In Kazakhstan, meantime, Bulat Utemuratov is trying to avoid the taint of his nation’s reputation as a dubious business destination. In his first lengthy interview with a news organization, Utemuratov tells Bloomberg Markets that he never used his government positions to amass one of Central Asia’s greatest fortunes.

Not all of the superwealthy added to their billions. EBX Group Co. founder Eike Batista was once Brazil’s wealthiest man and was No. 28 on Bloomberg’s list last year. He not only fell from the top 100 -- he lost his fortune after his commodities companies imploded.

Crunching Numbers

In calculating a billionaire’s net worth, we valued his or her stakes in publicly traded companies using closing prices of Sept. 30. Valuations of foreign assets were converted to U.S. dollars.

Closely held companies were valued in several ways. We compared the average enterprise value-to-sales; enterprise value-to-earnings before interest, taxes, depreciation and amortization; price-to-book value; or price-to-earnings multiples of similar publicly traded companies. Comparable companies were chosen based on the closely held company’s industry, size and location.

Estimates of company debt were based on the average net debt-to-Ebitda multiple of peers. A liquidity discount of 5 percent was applied to most closely held companies where assets might be hard to sell. Higher liquidity discounts were given to companies for which the structures were more complex. No liquidity discounts were used in calculating public stakes. In some instances, we also applied a country risk discount based on a person’s concentration of assets.

We usually valued real estate by applying average regional occupancy and capitalization rates to the square footage of closely held commercial properties. For personal property, we used its appraisal value. Land was valued using the market price per acre.

Yachts, Planes

Estimates for art, furniture and jewelry were based on their insured value and expert assessments. Yachts, planes and other vehicles were assessed based on market value. Net worth estimates include dividends, proceeds from asset sales and real estate. In cases where most of a fortune comes from closely held companies, estimated dividends are calculated only if historical financial information is available.

We deducted taxes based on personal income, dividend and capital gains rates in a billionaire’s country of residence. Taxes were applied at the highest rate unless there was evidence to support a lower percentage. For estimates of cash and other invested assets, we applied a hybrid market return based on holdings in cash, government bonds, equities and commodities. We attempted to identify and confirm all potential liabilities.

Personal Debt

No assumptions were made about personal debt. Family members often hold a portion of the billionaire’s assets. Such transfers don’t change the nature of who ultimately controls the fortune.

We operate under the rule that all billionaire fortunes are inherently family fortunes. Each billionaire or his or her representative has been given an opportunity to respond to questions regarding the calculation of his or her net worth.

Bloomberg News editorial policy is to not cover Bloomberg LP. As a result, Michael Bloomberg, the founder and majority owner of Bloomberg LP, wasn’t considered for this ranking. On the Bloomberg Professional service, net worth figures of the top 200 billionaires are updated at the close of each business day on RICH .


© Copyright 2014 Bloomberg News. All rights reserved.

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