The Bloomberg Billionaires Index is a daily ranking of the world's richest people. In calculating net worth, Bloomberg News strives to provide the most transparent calculations available and each individual billionaire profile contains a detailed analysis of how that person's fortune is tallied.
The index is a dynamic measure of personal wealth based on changes in markets, the economy and Bloomberg reporting. Each net worth figure is updated every business day after the close of trading in New York. Stakes in publicly traded companies are valued using the share's most recent closing price. Valuations are converted to U.S. dollars at current exchange rates.
Closely held companies are valued in several ways, such as by comparing the enterprise value-to-Ebitda or price-to-earnings ratios of similar public companies, or by using comparable transactions. Calculations of closely held company debt -- if net debt cannot be determined -- are based on the net debt-to-Ebitda ratios of comparable peers. The value of closely held companies adjusts daily based on market moves for peer companies or by applying the market movement of a relevant industry index. The criteria used to choose peer companies is based on the closely held asset's industry and size.
When ownership of closely held assets cannot be verified, they aren't included in the calculations. The specific valuation methodology for each closely held company is included in the net worth analysis section of a billionaire's profile. Additional details included in the valuation notes for each asset are available to subscribers of the Bloomberg Professional Service.
A standard liquidity discount of 5 percent is applied to most closely held companies where assets may be hard to sell. When a different percentage is used an explanation is given. No liquidity discounts are applied to the values of public stakes. In some instances, a country risk discount is also applied, based on a person's concentration of assets and ease of selling them in a given geography. A country's risk is assessed based on Standard & Poor's sovereign debt ratings.
If a billionaire has pledged as collateral shares he or she holds in a public company, the value of those shares are removed from the net worth calculation. If reliable information can be obtained about the ultimate use of those borrowed funds, that value is added back into the calculation.
Hedge fund businesses are valued using the average market capitalization-to-assets under management ratios of the most comparable publicly traded funds. Fee income is not considered because it cannot be uniformly verified and personal funds invested along with outside capital are not included in the calculation. A "key man" risk discount of 25 percent is applied to funds whose performance is tied to a single individual. Assets under management are updated using ADV forms filed with the federal government and news reports, and returns are factored when sourced to reports from credible news outfits, the HFRI Index and industry analysts.
Net worth calculations include dividend income paid and proceeds from the sale of public and closely held shares. Taxes are deducted based on prevailing income, dividend and capital gains tax rates in a billionaire's country of residence. Taxes are applied at the highest rate unless there is evidence to support a lower percentage, in which case an explanation is given in the net worth summary. For calculations of cash and other investable assets, a hybrid return based on holdings in cash, government bonds, equities and commodities is applied.
No assumptions are 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. As a result, Bloomberg News operates under the rule that all billionaire fortunes are inherently family fortunes.
Each billionaire -- or a representative -- is given an opportunity to respond to questions regarding the net worth calculation, including assets and liabilities.
Bloomberg News editorial policy is to not cover Bloomberg L.P. As a result Michael Bloomberg, the founder and majority owner of Bloomberg L.P., isn't considered for this ranking.
Because calculating net worth requires a degree of estimation, bull and bear case scenarios that would make a person's fortune higher or lower than the Bloomberg Billionaires Index valuation are included on the Bloomberg Professional Service. A confidence rating also is included on each profile:
5 Star - The majority of the individual's fortune is held in publicly traded companies. The billionaire or their representatives provides insight on the net worth calculation.
4 Star - The majority of the individual's fortune is held in publicly traded companies or closely held operations in a country where transparent data is available. The billionaire may hold shares through a holding company where ownership is not transparent. The billionaire or their representatives may provide insight on the net worth calculation.
3 Star - The majority of the individual's fortune is held in closely held companies, or public companies based in a country where transparent information is often unreliable. The billionaire or their representatives won't comment on the net worth calculation.
2 Star - The majority of the individual's fortune is held in closely held assets. Often more than half of the calculation is based on an estimation of cash and other outside investments. The billionaire or their representatives won't comment on the net worth calculation.
1 Star - The majority of the individual's fortune is held in closely held assets where limited information is available. Often almost all of the calculation is based on an estimation of cash and other investable securities. The billionaire or their representatives won't comment on the net worth calculation.