Billionaires Worth $3.7 Trillion Surge as Gates Wins 2013Matthew G. Miller and Peter Newcomb
The richest people on the planet got even richer in 2013, adding $524 billion to their collective net worth, according to the Bloomberg Billionaires Index, a daily ranking of the world’s 300 wealthiest individuals.
The aggregate net worth of the world’s top billionaires stood at $3.7 trillion at the market close on Dec. 31, according to the ranking. The biggest gains came in the technology industry, which soared 28 percent during the year. Of the 300 people who appeared on the final ranking of 2013, only 70 registered a net loss for the 12-month period.
“The rich will keep getting richer in 2014,” John Catsimatidis, the billionaire founder of real estate and energy conglomerate Red Apple Group Inc., said in a telephone interview from his New York office. “Interest rates will remain low, equity markets will keep rising, and the economy will grow at less than 2 percent.”
Bill Gates, the founder and chairman of Redmond, Washington-based Microsoft Corp., was the year’s biggest gainer. The 58-year-old tycoon’s fortune increased by $15.8 billion to $78.5 billion, according to the index, as shares of Microsoft, the world’s largest software maker, rose 40 percent.
Gates recaptured the title of world’s richest person on May 16 from Mexican investor Carlos Slim. Gates’s fortune has also benefited from a rally in stock holdings that include the Canadian National Railway Co. and sanitizing-products maker Ecolab Inc., which rose 34 percent and 45 percent respectively.
Most of Gates’s assets are held in Cascade Investment LLC, an entity through which he owns stakes in about three dozen publicly traded companies and several closely held businesses, including Four Seasons Hotels and Resorts and Corbis Corp., a photo-archive company. Less than a quarter of Gates’s fortune is held in Microsoft. He’s donated $28 billion to the Bill & Melinda Gates Foundation.
John Pinette, a spokesman for Gates, declined to comment.
Global stocks soared in 2013 for the best annual gain since 2009, with the MSCI World Index advancing 24 percent during the year to close at 1,661.07 on Dec. 31. The Standard and Poor’s 500 Index rose 30 percent to close at 1,848.36, its best yearly gain since 1997. The Stoxx Europe 600 gained 17 percent to close at 328.26.
Companies in the S&P 500 are worth $3.7 trillion more today than they were 12 months ago following a year when Federal Reserve Chairman Ben S. Bernanke signaled the curtailment of economic stimulus. The bull market, born at the depths of the credit crisis, enters its sixth year fueled by near-zero interest rates and conviction among investors that it’s finally safe to own equities again.
Sheldon Adelson, founder of Las Vegas Sands Corp., the world’s largest casino company, was the second-biggest gainer in 2013, adding $14.4 billion to his net worth as the company’s shares rose 71 percent. Gaming revenue from the six operators of China’s only legal casinos rose 18.6 percent to 360.75 billion patacas ($45.2 billion) last year, Macau’s Gaming Inspection and Coordination Bureau said today.
Las Vegas Sands had revenue of $13.2 billion in the 12 months ending Sept. 30. More than 58 percent of its sales come from Macau.
Slim lost $1.4 billion during 2013. His America Movil SAB, the largest mobile-phone operator in the Americas, dropped 12 percent in the first three months of the year after Mexico’s Congress passed a bill to quash the billionaire’s market dominance. The company finished the year up 2 percent after a planned expansion into Europe was reined in, reassuring investors who were leery about the billions of dollars in investment the strategy would require.
The 73-year-old Mexican is $51 billion ahead of Jorge Paulo Lemann, Latin America’s second-richest person and Brazil’s wealthiest. Lemann’s 3G Capital completed its $29 billion acquisition of Pittsburgh-based HJ Heinz Co. in June, a transaction done with Warren Buffett’s Berkshire Hathaway Inc. With his two partners, the Brazilian billionaire, a former professional tennis player, manages three iconic American brands: Burger King, Budweiser beer and Heinz ketchup.
Latin America’s third-wealthiest person is Colombian Luis Carlos Sarmiento, who controls more than a quarter of the country’s financial industry through four publicly traded banks that form Bogota-based Grupo Aval. His net worth fell 7.4 percent to $16.7 billion, according to the Bloomberg ranking.
Nobody lost more of their fortune than Eike Batista, whose net worth declined more than $12 billion during the year. OGX Petroleo & Gas Participacoes SA, the oil company that transformed him into Brazil’s richest man, filed for bankruptcy protection in October. Batista was the world’s eighth-richest person in March 2012, and now has a negative net worth, according to the Bloomberg ranking.
“His loss of credibility is explained by not delivering on the results promised when he listed his companies,” Elad Revi, an investment analyst at Spinelli SA, said by telephone in a July 26 interview from Sao Paulo. “There was a chain reaction: he lost credibility in one, then he lost it in all of them.”
Bloomberg News uncovered 109 billionaires in 2013 who have never appeared on an international wealth ranking, including Lynsi Torres, the youngest female billionaire in the U.S. The 31-year-old heiress to In-N-Out Burger has watched her family expand the chain from a single drive-through hamburger stand founded in 1948 in Baldwin Park, California, into a fast-food empire valued at more than $1 billion, according to data compiled by Bloomberg.
John “Johnny” Morris became a billionaire by stitching together shopping outlets for multiple outdoor sports and adding a touch of entertainment to the mix. Since founding Bass Pro Shops LLC in 1972 in his father’s liquor store in Springfield, Missouri, Morris has expanded to at least 58 superstores, with 20 more planned. The company makes a variety of fishing boats and house-apparel brands, and controls a chain of full-service restaurants inside the stores.
Stephen Orenstein, 50, made his fortune in more hostile environs. As the majority owner of Supreme Group BV, Orenstein has overseen the delivery of food and fuel to some of the most inhospitable parts of the world, including Liberia, Mali and Sudan. His biggest business has been supplying military personnel in Afghanistan, where contractors dodge bullets fired by the Taliban and explosives set by insurgents.
Shutterstock Inc. founder Jonathan Oringer rode a 222 percent surge in his company’s stock to become the first billionaire to emerge from Silicon Alley, a collection of technology startups in New York. The 39-year-old founded Shutterstock in 2003 with 30,000 of his own pictures and turned it into the world’s largest stock photo and video marketplace. He has net worth of $1.5 billion.
C. James “Jim” Koch popularized craft beer in the U.S. and transformed Boston Beer Co. into the second-largest American-owned brewery. It also made him a billionaire, as frothy sales of his flagship Samuel Adams brand helped Boston Beer stock rally 80 percent in the past year.
“What he has done is amazing,” David Geary, president of D.L. Geary Brewing, a craft brewer in Portland, Maine, said in a telephone interview in September. “He’s very focused, a brilliant marketer and he sort of taught us all how to sell beer.”
Jonathan Gray, the 43-year-old who runs Blackstone Group LP’s real estate business, became a billionaire when shares of the New York-based private-equity firm surged in May. Blackstone stock doubled last year as the company sold assets and returned money to private and public shareholders. Gray has a fortune valued at $1.4 billion.
Elon Musk’s net worth had the biggest percentage gain by a self-made billionaire, surging 233 percent during the year. Musk’s Tesla Motors Inc., the electric-car maker being reviewed by U.S. regulators over battery-related fires, more than quadrupled, helping the billionaire add $5.6 billion to his fortune.
Palo Alto, California-based Tesla’s flagship Model S sedan, with a $70,000 base price, kept its 5-star rating for crash worthiness, the highest designation given by the National Highway Traffic Safety Administration. The agency opened a review of the car in November after fires in Tennessee and Washington state occurred when drivers struck metal debris.
Mark Zuckerberg was technology’s biggest dollar gainer, adding $12.4 billion to his net worth as Facebook Inc. shares more than doubled. The chief executive officer of the world’s largest social-networking company sold more than $2 billion in stock last month and donated another $1 billion to the Silicon Valley Community Foundation.
The fortunes of Larry Page and Sergey Brin, the founders of Google Inc., surged about $10 billion each as the world’s largest search-engine business rose 58 percent.
“Google is very much investing,” Eric Schmidt, the company’s chairman and the world’s 118th-richest person, said in an interview. “We’re hiring globally. We see strong growth with the arrival of the Internet everywhere.”
Carl Icahn spent much of the year jousting with other billionaires while adding $7 billion to his net worth. The 77-year-old financier battled with short-seller Bill Ackman over Herbalife Ltd., and tried to snatch Dell Inc. from founder Michael Dell during his failed attempt to take the company private.
He also took bond maven Bill Gross to task in a fight played out on Twitter, demanding the billionaire join him in committing to the Giving Pledge, which encourages the world’s richest to give the majority of their wealth to charity.
Henry Kravis’s fortune rose about $740 million this year. KKR & Co., the private-equity firm he founded with his cousin George Roberts, said in December that it raised $1.5 billion for its first real estate fund, with most of the money to be spent in North America and as much as a quarter of it in western Europe.
“We think energy on a global basis is going to be very interesting for us,” Kravis said in a November interview. “And of course with the uncertainty in health care, that does create some opportunities for us.”
The outlook was less rosy for Steven A. Cohen, the founder of SAC Capital Advisors LP. While the company posted a 20 percent gain in 2013, according to a person briefed on the the returns, the 57-year-old tycoon’s $14 billion hedge-fund firm struck a $1.8 billion deal in November to end a criminal investigation into insider trading.
U.S. Attorney Preet Bharara called SAC “a veritable magnet for market cheaters,” in an insider-trading scheme that dated back to 1999. SAC agreed to pay the record fine and shutter its investment advisory business. Cohen will still manage his personal wealth, which is valued at $8.7 billion.
Li Ka-Shing remains Asia’s richest man with a fortune of $30.2 billion. The 85-year-old controls the Cheung Kong Holdings Ltd. property investment company and conglomerate Hutchison Whampoa Ltd.
The billionaire indicated in October he may sell stakes in Hutchison’s retail unit and Power Assets Holdings Ltd., Hong Kong’s second-largest power supplier, to free up capital to acquire more assets in Europe, where his companies have spent $14.5 billion on acquisitions the past three years, according to data compiled by Bloomberg.
The biggest gainer in Asia was Macau casino mogul Lui Che Woo, who added $14.2 billion to his net worth. Lui’s Hong Kong-listed Galaxy Entertainment Group Ltd. has one of six gambling licenses in the Chinese enclave. The company is the second-largest by revenue and controls almost 20 percent of the city’s casino market.
Galaxy shares soared 129 percent in 2013 as Lui and his son Francis expanded their biggest property, Galaxy Macau, in the city’s Cotai area to capitalize on record visits by gamblers from China.
The title for China’s richest person changed hands twice during the year. Beverage billionaire Zong Qinghou was eclipsed in August by Dalian Wanda Group property and entertainment mogul Wang Jianlin after regulatory filings showed Wang’s non-real estate businesses are more valuable than previously calculated.
Robin Li, founder of Beijing-based Baidu Inc., dethroned Wang in December. China’s most-used search engine rallied 77 percent in 2013. The crown could change again. The country’s top four billionaires all have fortunes of $12 billion or more.
Fast Retailing Inc. Chairman Tadashi Yanai, Japan’s richest man, ended the year with a $20.9 billion fortune, up 66 percent in 12 months. SoftBank Corp. President Masayoshi Son’s wealth more than doubled to $19 billion. SoftBank paid $22 billion to acquire telecommunications provider Sprint Corp. in July, topping a competing offer by Dish Network Corp. billionaire Charlie Ergen.
Amancio Ortega held on to his title as Europe’s richest person. Inditex SA, the world’s largest clothing retailer, rose 14 percent during the year. The billionaire bought an office building in London’s West End for 410 million pounds ($679 million), a person with knowledge of the matter said.
Sergey Galitskiy, founder of OAO Magnit, Russia’s largest food retailer, added $5.3 billion to his net worth in 2013, more than any other Russian billionaire. The 46-year-old has a $13.8 billion fortune. The country’s richest person is Alisher Usmanov, 60, with a net worth of $20.2 billion.
Saudi billionaire Prince Alwaleed bin Talal remained the Middle East’s wealthiest person. He ended the year with a net worth of $32.4 billion, up $3.7 billion for the year. Aliko Dangote is Africa’s richest person. The founder of Dangote Group, one of the continent’s largest conglomerates, added $9.2 billion during the year. He’s the 30th-richest person in the world.
“Billionaires are asking what they should do with their money in 2014,” Mark Haefele, Global Head of Investment for UBS AG’s wealth-management unit, said by phone from New York. “Central banks will continue to be supportive, so equities will likely continue to rise during the year.”