How our richest investors lost $14bn
Monday, 22 September 2008
Last Updated: Tuesday, 23 September 2008
By James Thomson
A slight reprieve from a resounding sharemarket rout last week has not exactly saved their fortunes – but ‘devastation’ is still a word with some currency for the filthy rich.
The whooshing sound you heard on Friday evening was actually the sound of a lot of wealthy investors breathing a huge sigh of relief.
After last Thursday’s horror sharemarket dive, Australia’s top 30 sharemarket investors – a list that includes James Packer, Andrew Forrest, Frank Lowy and Gerry Harvey – had lost a staggering $2 billion over four awful days.
On Friday morning, Forrest was staring at a $775 million loss for the week. Packer’s portfolio had lost $356 million and Platinum Asset Management founder Kerr Neilson had watched the value of his stake dive $93 million.
But Friday’s rally will have helped send these big investors off on a slightly more enjoyable weekend, paring the total losses of the top 30 back to around $660 million. Packer’s losses were cut back to $232 million, Forrest’s back to $300 million, and Neilson’s losses softened to $23 million.
On Thursday, Westfield Group chairman Frank Lowy was staring at a loss for the week of $73 million; by Friday, his shares had actually risen $111 million for the week.
No-one has had a more difficult week than Macquarie Bank chief Nicholas Moore. In the first four days of the week, Macquarie’s stock dived around 30%, before staging a miraculous recovery on Friday when it jumped more than 35% in one day. Moore’s loss for the week shrunk from $14 million to $4 million between Friday morning and Friday night.
Even so, losing $4 million in a week isn’t exactly cause for celebration, and the value of Moore’s stake in Macquarie has fallen by almost $49 million since the start of the year to $42 million.
But don’t let Friday’s rally fool you – Australia’s richest sharemarket players have lost a bundle this year. The total value wiped off their portfolios since the start of 2008 is a whopping $14.3 billion.
Last week’s biggest loser was Fortescue Metals chief Andrew (Twiggy) Forrest. After taking the mantle of Australia’s richest man earlier this year, investors have inflicted plenty of pain on Fortescue’s share prices and Twiggy’s fortune.
Last week the value of his stake fell by $300 million and it is now down $1.4 billion since January. His stake in Fortescue is now worth just over $5.6 billion, and Twiggy’s grip on the title of richest Australian looks more tenuous by the day.
Not that his nearest rivals are having a good time of it. James Packer’s portfolio, which includes investments in Crown, Consolidated Media, property developer Sunland and financial services company Challenger, is off $2.1 billion since the start of the year. His biggest dog stock is uranium explorer Wildhorse Energy, which has shed 79% since the start of the year. Packer’s listed portfolio is now worth around $3.3 billion.
Frank Lowy has fared the best of the big three. Westfield shares have fallen about 15% since the start of the year and the value of Lowy’s stake is down $560 million to $3.2 billion.
Seven Network boss Kerry Stokes is another who is coming off a very rough week, with his stakes in Seven Network and manufacturer Nylex falling by a combined $76 million. Stokes’s portfolio is down a whopping $808 million this year, despite Seven Network’s recent Olympics ratings success.
Mark Rowsthorn’s infrastructure group Asciano is carrying plenty of debt, and in the current market that is more than enough for investors to abandon ship. The value of Rowsthorn’s stake fell $47 million last week and is now down $241 million for the year to $202 million.
Two of the biggest losers in 2008 have been Gerry Harvey and Ian Norman, co-founders of retail giant Harvey Norman. The company’s shares were actually steady last week, but that’s not much consolation for Australia’s retail king – Harvey has lost $1 billion this year and his stake is now worth $1.1 billion.
WorleyParsons executive John Grill and former employee Bill Paterson have also been on a losing streak, with the engineering company’s stock falling 38.4% over the year. Grill’s stake shrunk $14 million last week, and is now down $640 million since the start of the year. Paterson’s stake has fallen $385 million to $620 million.
Amazingly, only one member of the 30 wealthiest investors has actually seen the value of their shares rise this year. Doug Rathbone, chief executive of agricultural chemicals company Nufarm, had been helped by increased investor interest in the commodity boom. The value of his stake has increased by $39 million since January to $459 million.
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