RICH PICKINGS: Five names to watch in 2013
As 2012 draws to a close, it's time to put the spotlight on members of the super-rich club who promise to make the coming year a more exciting one by either making headlines or raking in the cash.
For those in the mining game, 2012 will be remembered as the year when things got much tougher. For the rest of the super-rich club, 2012 will be remembered as a year of shifting sands, when uncertainty about the state of the Australian economy and the global recovery put the brakes on growth.
But while entrepreneurs might not enter 2013 with a strong sense of where the economy is heading, it could be the year when the wealthy get off their hands and start chasing growth opportunities.
With this in mind, I’ve picked five rich listers to keep a close eye on in 2013. These are the entrepreneurs that will either make the news, or make plenty of cash:
Since Brett Blundy privatised his retail group in late 2006 he has largely dropped from public view. But he continues to quietly build a retail empire, concentrating on relatively unloved property assets to find bargains. In December, Blundy purchased the Midland Central Homemaker Centre in Perth for $43.1 million, taking his tally of bulky goods retail centres to nine. All up, the portfolio’s value has been put at $500 million.
Blundy recently raised $40 million from property syndicate investors to target his latest acquisition and more like it; he is reportedly looking at buying a stake in GPT’s $200 million Homemaker centre portfolio in Queensland.
Blundy’s wealth fell from $938 million to $835 million according to BRW, presumably as a result of falling property prices. But Blundy clearly feels that the retail sector’s struggles are allowing him to find bargains that will pay off in the long term.
Gina Rinehart’s $29 billion valuation is certain to take a substantial hit in the 2013 Rich 200 edition, although how much of a hit depends very much on what happens to iron ore prices in the next few months.
But regardless of what happens to Rinehart numerically, her empire is at an interesting point. Construction of the Roy Hill mine, the $10 billion project that would finally make her a miner in her own right, been delayed until mid-2013, pushing the date of first production date of the end of 2014 into the next year.
Next year also represents D-Day when it comes to getting the finance for the project in place; Rinehart needs export credit agencies to provide $4 billion in funding and commercial banks to provide a further $3 billion. Rinehart’s partners in the project, including Korea’s Posco (owner of 12.5 per cent), Japan’s Marubeni (12.5 per cent), Korea’s STX (2.5 per cent) and Taiwan’s China Steel (2.5 per cent) have already agreed to contribute $3.2 billion.
It’s a big year for Rinehart. After a year of media plays and books, mining is likely to be her strict focus.
I’ve already named James Packer my rich lister of 2012, so it’s probably no surprise he’s on my list of entrepreneurs to watch in 2013.
One key reason is that Packer will complete the sale of his stake in Consolidated Media and so will be cashed up to the tune of $1 billion. Does he pump it into Crown’s Sydney casino ambitions? Does he pump it into Crown shares and increase his stake? Does he look to expand into another industry? Does he buy a fat stake in a listed group as he has done with Treasury Wines this year?
Packer might do a combination of all these things, although his focus does appear to be on winning the right to build a second casino in Sydney at the Barangaroo project. Packer appears to consider this an empire-making statement and he is unlikely to be denied.
Where is the empire of Clive Palmer at? Building a new Titanic, creating a dinosaur park and getting involved in Australian politics are all sideshows when it comes to the job of making serious money. But his true cash cow suddenly seems to be under some pressure.
Palmer’s billion-dollar valuation has largely been based on royalties that will flow to him from the $US8 billion Sino Iron in Western Australia, which is being developed by Chinese conglomerate CITIC Pacific. CITIC has paid Palmer’s company Mineralogy more than $600 million for the right to mine three billion tonnes of iron ore at the project. As part of the deal, Palmer gets 30 cents for every tonne of iron ore mined.
It’s a lucrative deal, but the project has been plagued by delays and CITIC and Palmer have recently been in court arguing about the terms of the royalty payments. Palmer, a self-described China expert, even went as far as describing CITIC as "running scared” before the company won an injunction against him.
This case is crucial to Palmer’s wealth and the well-known lover of litigation doesn’t want to get it wrong.
You won’t actually be able to watch David Teoh next year, because I can’t tell you what he looks like – the reclusive founder of telecommunications group TPG keeps well away from the cameras.
But Teoh is quietly heading for the billionaire’s club. The value of his stake in TPG has grown from $387 million to almost $730 million, a phenomenal rise given the competiveness of the telco market and the relatively tepid state of the ASX.
Teoh and TPG are variously mentioned as a potential bidder Leighton Holding’s telco group Nextgen and even Michael Malone’s ISP iiNet, in which TPG has a major stake.
Teoh, the telco sector’s silent assassin, could be looking to make some serious waves next year.
POSTSCRIPT: This will be my final Rich Pickings column. I’ve thoroughly enjoyed examining the fortunes and lives of the rich and famous over the last five years and thank you for your comment, ideas and kind words.