RICH PICKINGS:Quarter time

While the majority of Australian investors have taken a hammering over the past year, the first three months of 2009 wasn't that bad for a group of Australia's richest investors.

Australia’s 20 richest investors – a list that includes James Packer, Frank Lowy, Kerry Stokes and Gerry Harvey – have started the year on a positive note, finally beating the market after taking a hammering for most of 2008.

While the All Ordinaries lost just under 4 per cent in the three months to March 31, these rich investors were able to limit their losses to just under 2 per cent. The total wealth held by these investors fell to $14.8 billion from $15.1 billion, although it is worth noting that their total publically listed wealth has dropped from $28.4 billion at the end of the first quarter of 2008.

A number of entrepreneurs actually managed to increase the value of their holdings, with James Packer’s investments up $98 million to $2.4 billion, and Andrew Forrest’s stake in Fortescue Metals climbing by around $624 million to $2.5 billion.

The biggest loser was Frank Lowy, whose stake in shopping centre empire Westfield fell $529 million to $1.8 billion. Another prominent loser was John B Fairfax, who saw the value of his stake in Fairfax Media drop $134 million to $218 million; it was worth $751 million at this time last year.

With a quarter of the year gone, it's time to take a look at the list of the 10 richest people in Australia. As you can see, the names have stayed the same, but the valuations are quite different.

Frank Lowy$4.0 billion$6.3 billion
Richard Pratt$3.9 billion$5.48 billion
James Packer$3.7 billion$6.1 billion
Gina Rinehart$3.3 billion$4.39 billion
Andrew Forrest$2.57 billion$9.41 billion
John Gandel $2.4 billion$3.21 billion
Harry Triguboff$2.3 billion$3.25 billion
Kerry Stokes$2.2 billion$2.76 billion
David Hains$1.6 billion$2.28 billion
Len Buckeridge$1.58 billion$2.1 billion

*Source: BRW Rich 200, 2008

Please note, these valuations are intended as estimates only and have been compiled using share price data and other publically available information. For entrepreneurs who hold their wealth through private companies, I have used public company proxies (for example, Amcor is used as a proxy for Richard Pratt's Visy empire) as a rough estimate of prevailing asset values.

The top 10

Frank Lowy
For so long, Lowy looked like he could escape the carnage that had hit his fellow wealthy entrepreneurs. But Westfield shares have taken a beating in the past few months, falling 22 per cent since the start of the year and wiping $530 million off the value of the Lowy family’s stake. The stock is now down over 40 per cent over the last 12 months. The family’s private assets are extremely difficult to value, but given the performance of investment and property markets it seems reasonable to apply a 40 per cent discount to Lowy’s entire fortune.

Richard Pratt
Pratt has had a tough year battling illness, but his Visy paper and recycling empire had a win recently when it managed to secure $500 million of funding from its banking syndicate. However, the downturn has been tough on the paper sector, as evidenced by the 32 per cent fall in rival Amcor’s share price over the last 12 months. Pratt’s extensive investment portfolio would have also taken a beating.

James Packer
Despite reports James Packer is selling off toys like the corporate jet and his luxury yacht, the man formerly known as Australia’s richest has actually had a reasonable quarter, with the value of his portfolio increasing $100 million over the three months, thanks mainly to a jump in price of Crown. But the values of Packer’s listed holdings are down about 40 per cent over the last 12 months.

Gina Rinehart
Valuing Rinehart’s fortune is extremely difficult as there are few public estimates of the size and quality of her iron-ore tenements. Rio Tinto’s shares are down over 60 per cent, while BHP Billiton’s stock is down around 18 per cent. Given this, it seems reasonable to assume the value of Rinehart’s assets would be down by at least 25 per cent.

Andrew Forrest
The fun never ends for Twiggy. One minute he is doing deals with Chinese investors, the next he’s in court locking horns with ASIC. Forrest’s fortune has taken a beating over the last 12 months, but the value of his stake in Fortescue Metals Group has actually increased by about $625 million since the start of the year.

John Gandel
Reclusive billionaire John Gandel holds a number of prime retail property investments in Melbourne, including a half-share in Melbourne’s Highpoint Shopping Centre. Shopping centre values are likely to have fallen quite sharply in the last 12 months, but a lack of transactions makes this difficult to quantify. However, it is worth noting that the Gandel family’s stake in CFS Retail Trust has fallen around 25 per cent in the last 12 months.

Harry Triguboff
Sydney’s apartment king remains up-beat, talking up the prospects for the apartment market and swooping on sites at bargain-basement prices. Judging exactly how far the value of his fortune may have fallen is difficult given a lack of property deals, but most listed property companies have slumped more than 50 per cent in the last 12 months. However, Triguboff’s willingness to spend indicates his debt levels are far better than most of these businesses.

Kerry Stokes
The executive chairman of Seven Network, Kerry Stokes, has had a mixed year. Seven’s share price has fallen by over 35 per cent and his investment in diversified manufacturer Nylex is now worthless after the company collapsed earlier this year. Stokes also has extensive private holdings, including ownership of the Australian distribution rights for Caterpillar heavy equipment. While the mining bubble is losing air fast, Caterpillar should still have enjoyed a reasonable year.

David Hains
Secretive hedge fund manager David Hains is nearly impossible to value. The nature of his holdings, their location and their size is unknown – all anybody knows is that his Portland Group operates a giant hedge fund operation. Exactly how that hedge fund has performed during the crisis is a mystery, although hedge funds dropped around 30 per cent last year and are tipped to drop about 20 per cent this year.

Len Buckeridge
Perth billionaire Len Buckeridge has watched his fortune soar in recent years as his building products group BCG has ridden the Western Australian economic boom. But WA is slowing fast and building products companies such as Boral and Alesco have fallen by up to 40 per cent. Buckeridge’s fortune is likely to be down at least 25 per cent.

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