RICH PICKINGS: Silver lining

As Australia's business elite suffer humiliating downgrades in net worth, the next crop of Australia's super rich are just starting to burst from the soil.

It’s been a bad start to the year for Australia’s rich. The big boys like James Packer and Frank Lowy have seen the value of their stakes in Crown and Westfield fall by hundreds of millions. Entrepreneurs like Eddy Groves, Michael King and David Coe have been all but wiped out.

But this is a long weekend – it’s a time to celebrate and unwind. So let’s cast off those glum faces and try and figure out which of our wealthy entrepreneurs has actually made some money in 2008.

They are not easy to find. A look at the performance of the S&P ASX 300 since the start of the year reveals that just 35 companies have actually managed to increase their share prices. Not surprisingly, 21 of these are resources companies. Junior gold companies have performed particularly well as the gold price has soared above $US1000.

Lynas Corporation, which describes itself as a "rare earth” miner (its minerals are used in digital technology products), has posted the best performance on the ASX300 this year, with its shares up 32.7 per cent. The big winner there is chief executive Nicholas Curtis, whose stake has increased in value from $25 million to $33 million.

Shares in coal miner Felix Resources are up 24 per cent since the start of the year, helping boost the valuations of directors Brian Flannery and Travers Duncan to $293 million and $298 million respectively. The sharp rise in Felix’s stock price over the last 12 months – it has more than doubled – will put Flannery and Travers on BRW’s Rich 200, which is out in late May.

Separately, the announcement of a merger between Lihir Gold and Equigold should provide another boost to the fortune of Equigold chairman of Nick Giorgetta. The value of his stake in the company has increased about 18 per cent since the start of the year to around $106 million. Another gold miner that has done well is Sino Gold, which has posted a share price rise of 18 per cent rise since the start of the year. That will please managing director Jacob Klein, whose stake is now worth $33.3 million.

Ken Talbot, the founder and former chief executive of coal miner Macarthur Coal, is still fighting corruption charges over his relationship with former Queensland minister Gordon Nuttal. But he will take some solace in Macarthur Coal’s performance. Its shares are up a tick over 18 per cent, boosting the value of Talbot’s stake from $500 million to $593 million.

Outside of the miners, that other great boom – the soft commodity boom – is helping to boost the fortunes of some of our wealthiest entrepreneurs.

Doug Rathbone looked set to sell his stake in agricultural chemicals business Nufarm last November after the company received a takeover bid from Chinese chemical giant China National Chemical Corporation and the private equity firms Blackstone and Fox Paine. But the bid – which was priced at $17.25 a share – fell through after the consortium failed to get its funding together. The shares slumped to $14.17 by the end of 2007 but have since spiked to $15.62. That has helped boost the value of Rathbone’s stake from $424 million to $467 million since the start of the year.

Fertiliser manufacturer Incitec Pivot is the other star of the agribusiness world, with its shares gaining 19.5 per cent since January. Managing director Julian Segal has a handy stake worth $12.4 million.

Another person benefitting from surging soft commodity demand is tuna fisherman Hagen Stehr, the largest shareholder in aquaculture company Clean Seas Tuna. Earlier this month, Clean Seas announced it had become the first company in the world to artificially breed Southern Bluefin tuna. Stehr now hopes he can now build Clean Seas’ artificial breeding program to the point where the company is producing the same amount of tuna as is caught in the wild each year. Clean Seas shares are up 12.5 per cent since the start of the year, lifting the value of Stehr’s stake to $137 million.

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