Andrew Heathcote Rich Lists editor

Andrew is BRW's Rich lists editor and is responsible for the Rich 200 and Young Rich flagship issues. He also reports on matters relating to wealth and investment for BRW and The Australian Financial Review.

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Rich 200 get richer: Our top 10 billionaires enjoy a year to remember

Published 14 November 2013 00:44, Updated 14 November 2013 13:18

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Rich 200 get richer: Our top 10 billionaires enjoy a year to remember

Low interest rates have afforded billionaire property developer Harry Triguboff a long-awaited windfall of $500 million since May. Photo: Louie Douvis

Harry Triguboff is keen to make up for lost time. The 80-year-old billionaire has been buying up several big development sites, speeding up construction and enjoying strong sales in his residential apartment empire as property prices take off.

His estimated net wealth has risen by $500 million since May, making him wealthier than he’s ever been before.

“We wasted five years with high interest rates,” Triguboff tells BRW after reaping rich rewards from the Reserve Bank’s decision to cut the official cash rate to a record low in August.

Low interest rates make it easier for people to buy apartments and for Triguboff to build more.

Triguboff wants to cash in on the economic conditions that have substantially boosted his wealth this year. He is one of several billionaires to have enjoyed a very lucrative six months. It’s been so good for some that Triguboff has gone from being the sixth-richest Australian to the eighth-richest, despite having made a $500 million gain on paper.

Mining boom not over for everyone

Since the Rich 200 List was published in May, the 10 richest people in the country have lifted their combined wealth by $8.65 billion. It’s a phenomenal result, brought about by better than expected conditions in the mining sector as well as some strong performances by some of our best-known billionaires.

Mining magnate Andrew Forrest has had the biggest gain with a $1.8 billion increase to $5.5 billion. Forrest has benefited from investors’ renewed confidence in his big iron ore company Fortescue Metals Group, which has alleviated some debt problems and is set to significantly ramp up production over the next few years.

Fortescue shares have spiked by 60 per cent over the past six months and no one has benefited more from the increase than the biggest shareholder, Forrest.

The country’s richest person hasn’t missed out either. Gina Rinehart’s wealth has risen by $1.5 billion to reach $23.5 billion. The raising of debt financing for her majority-owned Roy Hill mine hasn’t happened as quickly as she might have hoped, but it remains on track to begin operating in 2015.

Assuming iron ore prices stay strong, as they have done over the past six months, Rinehart should be in line for an even bigger boost then.

Chinese tourism a boon for Packer

James Packer has had the second biggest gain. His $1.7 billion rise to $7.7 billion moves him into second spot behind Rinehart and is only $100 million less than the rise in Forrest’s wealth. Collectively, Packer and Forrest have increased their wealth by 36 per cent in half a year.

Packer achieved his increase due mainly to the surging share price of Crown Resorts. Its $6 billion Macau joint venture has been a big winner for Crown, and Packer has been working hard to capture business from growing numbers of Chinese tourists at his other casinos. Packer also recently realised big profits by selling his stakes in fast-growing companies Magellan Financial Group and SEEK.

One of the most surprising rises is by little-known Hui Wing Mau. The Chinese-based Australian citizen has lifted his wealth by $1.2 billion, despite rarely being mentioned in the local press. Hui is a major shareholder in the property development company he founded, Shimao Property Holdings.

Its tightly-held shares have risen strongly on the Hong Kong Stock Exchange this year.

Share price growth for another foreign-based Australian citizen, Ivan Glasenberg, led to an $800 million rise in his net wealth to $6.4 billion. The Glencore Xstrata boss can also lay claim to the year’s biggest dividend cheque. He got about $180 million in March, while Forrest got $102 million in August.

Not all plain sailing

John Gandel is the only member of the top 10 to experience a fall in wealth. He is down by $100 million to $3.6 billion.

Softness in the retail sector has also hurt the other shopping centre magnate in the top 10, Frank Lowy. He has enjoyed a $300 million gain, due mainly to his decision to diversify much of his family’s wealth away from his flagship Westfield Group.

Despite the rise, Lowy falls to third after ranking second on this year’s Rich 200 List.

Whether the country’s richest billionaires can maintain the strong gains posted in the last six months in the lead up to 2014’s Rich 200 remains to be seen. But Triguboff, for one, isn’t deterred by the challenge. He says his business is well positioned to cope with further shifts in the business cycle and he can keep growing his wealth.

“There are no bad years,” he says. “It is very important to be optimistic.”

Rich list update

The 10 richest people in the country have enjoyed massive windfalls since the Rich 200 was published in May, but Gina Rinehart still comes out on top.

1. GINA RINEHART

Photo: Robert Shakespeare

Work continues on Gina Rinehart’s $10 billion attempt to fulfil her father’s legacy. She wants to build her first mine and is in the process of raising the $7 billion in debt financing she needs to complete the game-changing project. Unfortunately, raising the money has proven more difficult than originally expected.

Rinehart and Roy Hill’s minority owners elected to put in an additional $624 million of their own money in September in order to keep construction going. Despite the funding problems, the developers of Rinehart’s mine remain confident it will be shipping iron ore by September 2015. While Rinehart may rack up more losses until then, she will be well-placed to take full advantage of the next mining boom.

The biggest impediment to her growing her fortune much larger may come from within her own family. A courtroom spat involving Rinehart, her four children and a family trust is yet to be resolved.

2. JAMES PACKER

Photo: Glenn Hunt

It is has been a tough year for James Packer personally but hugely rewarding from a business perspective. In September, Packer’s six-year marriage to Erica Packer came to an end. While Packer provided his ex-wife one of the country’s biggest divorce settlements – about $100 million – the gains he has made from his investments this year more than offset the expense.

His biggest asset, the recently renamed Crown Resorts, has enjoyed a stellar run on the sharemarket. Crown owns casinos in Melbourne and Perth as well as a lucrative joint venture in Asia, Melco Crown. In July, Crown got the go-ahead from New South Wales government to proceed with its controversial casino and hotel development at a prime harbourside position in Sydney’s Barangaroo.

Packer booked a big profit in August when he raised $261 million by selling shares in fast-growing funds manager Magellan and employment website SEEK. The money was rumoured to have been used in the divorce settlement.

3. FRANK LOWY

Photo: Sasha Woolley

He may not have enjoyed the same gains as some of the other top billionaires but Frank Lowy continues to find ways to boost his fortune. The decision to diversify much of his family’s money has helped, after shares in his flagship business Westfield Group fell since the Rich 200 was published in May.

Lowy has been quietly diversifying his wealth for decades but sped up the process last year when he sold his Westfield Retail Trust shares after earlier demerging this company from Westfield Group. It has proven to be a very smart decision, especially given investors’ concerns about the impact of patchy retail conditions on Westfield’s earnings.

Lowy remains chairman of Westfield but spends much of his time on his other great love – soccer. As chairman of the Football Federation of Australia, Lowy played a major role in the dismissal of national coach Holger Osieck and the appointment of his home-grown successor, Ange Postecoglou, in October.

4. ANTHONY PRATT & FAMILY

Photo: Jesse Marlow

While Anthony Pratt continues to build his big cardboard and box-making businesses in Australia and the US, it is his brothers-in-law who have stolen much of the spotlight over the past six months. Alex Waislitz, who is married to Pratt’s sister Heloise Waislitz, was inundated with cash in September after agreeing to manage the public’s money for the first time.

Waislitz is setting up an activist fund, Thorney Opportunities, and received $40 million to invest, mainly from a small group of wealthy individuals.

Pratt’s other sister is Fiona Geminder, who is married to Pact Group boss Raphael Geminder, who is moving towards a public float of the business after improvement in the IPO market.

Investment banks have been retained, investors are being approached and the business could be worth as much as $2 billion as a publicly listed entity. Pratt and his sisters each own one-third of their flagship business, Visy.

5. IVAN GLASENBERG

Photo: Bloomberg

The chief executive of Glencore Xstrata, Ivan Glasenberg has been busy trying to bed down his company’s acquisition of major miner Xstrata and find $2 billion in cost savings from the deal.

The takeover of Xstrata, a company in which Glencore already had a 34 per cent stake, was completed in May. The company has since been branded the world’s most diversified resources group and this diversification has helped it achieve a big lift in its share price after falling to a 12-month low in June.

Glasenberg’s wealth comes from his shareholding in Glencore Xstrata and, in March, these shares provided him dividend payments worth about $180 million. He got another $62 million from an interim dividend in August despite making an $8.9 million cut to the carrying value of Glencore Xstrata’s assets.

Glasenberg runs the $75 billion mining and commodities giant from his base in Switzerland but qualifies for the Rich 200 after taking out Australian citizenship in the 1980s.

6. HUI WING MAU

Photo: Bloomberg

Hui Wing Mau provided the biggest surprise on this year’s Rich 200. The little-known, Chinese-based property developer debuted on the list in seventh position with estimated net wealth of $4.82 billion. His fortune has grown considerably since then thanks to a rise in the share price of Hui’s Hong Kong-listed company, Shimao Property Holdings. The $8 billion business owns and develops residential apartments across mainland China and has been one of the biggest beneficiaries of China’s housing boom.

Also known as Xu Rongmao, Hui has enjoyed strong growth in his wealth over the past five years. Shimao joined the Hong Kong Stock Exchange in 2006 and recently reached its highest valuation since 2007.

Shimao is the majority owner of commercial property developer Shanghai Shimao, listed on the Shanghai Stock Exchange. Hui was active in the Australian property market in the early 1990s.

7. ANDREW FORREST

Photo: Bohdan Warchomij

Having boosted his wealth by almost $2 billion in the past six months, it is safe to say that Andrew Forrest is enjoying an impressive run. His fortune comes from his shares in the company he founded, Fortescue Metals Group, and the big Pilbara-based miner has been a favourite of investors over the past six months.

In its September production update, Fortescue announced several big wins. It is shipping more iron ore than it was a year ago and is benefiting from a lift in iron ore prices and strong demand from Chinese steel makers. Investors have also become more confident about Fortescue’s ability to overcome its widely discussed debt problems. Fortescue’s shares closed at $2.96 on June 25 but have since risen by 75 per cent.

Forrest received $102 million in dividends in August and made a $65 million donation to the University of Western Australia in October. The donation is believed to be the biggest philanthropic gift ever made in Australia.

8. HARRY TRIGUBOFF

Photo: Louie Douvis

Harry Triguboff has made about $500 million since turning 80 in March. The indefatigable Triguboff has appeared on every Rich 200 since it was first published in 1984 and looks set to appear next year with his highest ever valuation.

A one-time taxi driver, Triguboff founded his Meriton Group in 1963 and he has been building residential apartments in Sydney ever since. In October, he paid $142 million for a site in Pagewood, on which he plans to build 2000 apartments in a $1.4 billion development.

When announcing the acquisition, Triguboff described the planned project as his “biggest deal yet”. Triguboff has benefited from broad demographic shifts, including the rapid growth in Asian students coming to Sydney and growing willingness of locals to forgo big houses in the suburbs for the convenience of inner-city apartments. Low interest rates have also helped Triguboff this year.

9. JOHN GANDEL

As the half owner of the biggest shopping centre in the country, John Gandel will be hoping consumers dig deep this Christmas. Gandel has a half share of Chadstone Shopping Centre, which until recently was planning a 20,000-square-metre extension. This has since been scaled back to about 15,000 square metres due to a fall in rental income, as retailers struggle to boost sales.

The co-owner of Chadstone is ASX-listed CFS Retail Property Trust Group, a company in which Gandel holds a big stake. Shares in CFS Retail Property Trust are relatively flat over the past six months and up about 5 per cent for the year. The company has a half stake in the major Melbourne Emporium shopping centre, under development.

Gandel got into shopping centres in the 1980s after selling his half stake in women’s retail chain Sussan to his brother-in-law Marc Besen.

10. PAUL RAMSAY

Photo: Peter Braig

Paul Ramsay has never made the top 10 of a Rich 200. He came close in May when he was ranked 11th but a big lift in his personal fortune has since made him one of the 10 richest people in the country.

Ramsay has big stakes in publicly listed companies Prime Media Group and Ramsay Health Care and it is the latter that has been providing him his big lift this year. Ramsay Health Care stock is up 60 per cent over the past 12 months, making it one of the stars of the ASX. Over the space of a week in September, it grew by 9.9 per cent and gave Ramsay a $246 million paper gain.

Now worth more than $3 billion, Ramsay’s strong run is set to continue. In October, Ramsay Health Care announced plans to buy another group of hospitals in France. In May, it had 117 hospitals across Australia, the United Kingdom, France and Indonesia.

Graeme Wood: The low flyer

There haven’t been many Rich 200 members to lose money over the past six months but Graeme Wood has. The Wotif.com Holdings founder is at risk of missing next year’s Rich 200 after a 20 per cent fall in his travel company’s share price.

This pushes him within striking distance of the $235 million cut-off after making this year’s list with $310 million. Wotif.com is still making money but struggling to achieve the same earnings growth investors have come to expect. Soft sales have been blamed and the company is hoping accommodation bookings recover as economic confidence improves.

The fall in the Wotif.com share price is in stark contrast to the fast growth of another listed travel company with strong links to the Rich 200, Flight Centre. Its stock has almost doubled over the past year which has provided big gains to Rich listers Geoff Harris, Graham Turner and Bill James.

The next billionaire: Tony Perich

There may be no one better placed on the Rich 200 to take advantage of long-term demographic trends than Tony Perich. He and his family are farmers and landholders who are developing a major residential project in Oran Park, New South Wales. They are also major shareholders in one of the best-performing stocks on the ASX.

Freedom Foods is up about 330 per cent over the past 12 months on the back of strong sales of dairy and allergen-free foods. Concerns about food security and the proliferation of food allergies in Western countries are tipped to rise strongly over the next decade.

Future developments at Oran Park will also push up the Perichs’ wealth. They had an estimated net wealth of $875 million on the Rich 200 in May and it have risen higher since then. Billionaire status seems all but assured on next year’s list.

Craig Winkler: the shooting star

When Andrew Forrest made a $65 million to gift to the university sector in October, it was widely reported as the most generous philanthropic gift ever by an ultra-wealthy Australian. But there’s an argument that another gift by a Rich 200 member may be substantially more generous.

Former MYOB boss and Rich 200 member Craig Winkler is a major shareholder in accounting software company Xero. It has enjoyed phenomenal growth on the sharemarket, so much so that the investment bank Credit Suisse calls it the “Apple of accounting”.

Winkler, an active Christian, holds most of his stake in trust for a little-known charitable trust, and is a big supporter of indigenous causes. Xero is a New Zealand-based company that joined the ASX in November 2012.

At the time, the shares Winkler held in trust were worth about $95 million but by November 1 this year they were worth $535 million. By putting the shares in a charitable trust, Winkler has effectively given away more than $440 million.

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