Being part of the global billionaire class is beyond the imagination of most people. At the threshold of $1 billion, a 5 percent return would yield an annual interest payment of $50 million — without ever touching the principal. But how billionaires, from those in the single digits to near the top, invest shows a range of options for the very wealthiest in the world. One thing they all have in common is a large amount of money in cash or equivalently liquid securities. Here’s a look at how 10 billionaires have made and invested their money, according to public filings gathered by the financial research firm Wealth-X.
•Bernard Arnault, Chairman of LVMH – Estimated net worth: $38.1 billion
Bernard Arnault, 67, is the richest man in France. Trained as a civil engineer, he got his start in business from his father, who had a successful construction company. He shifted the focus of his father’s company to real estate and then turned his eye to luxury goods. Through his Groupe Arnault, the silver-haired Parisian sits at the helm of the luxury goods companies Christian Dior and LVMH Moët Hennessy Louis Vuitton. He is also a major art collector, having acquired works by Pablo Picasso and
His vast wealth sits predominantly in companies he controls. He has $34.8 billion held among Christian Dior, LVMH and Carrefour, a French retail chain. The next largest distribution is in cash at $2.9 billion; this is money from salaries, dividends and holdings that give him liquidity when he needs it. Then come the homes. He has a mansion in Paris worth $55 million and a home in the Bahamas worth $30 million, as well as yachts and art. His wealth shows how a single concentrated position in a company can increase your worth tremendously.
•Steven A. Ballmer, former Chief Executive of Microsoft – Estimated net worth: $30.8 billion
Steven Ballmer, 60, scored a perfect 800 on the mathematics portion of the SAT and punched his ticket from an elite private school in Detroit to Harvard University. In his sophomore year, he lived in the same dorm as Bill Gates, the co-founder of Microsoft. In 1980, he dropped out of Stanford University’s business school to start working for Gates. He was paid $50,000 but given a stake in the nascent company. He rose to become chief executive in 2000 — a post he held for nearly 14 years. Shortly after stepping down, he bought the Los Angeles Clippers basketball team for a record $2 billion. The team had been mired in controversy with a previous owner, Donald Sterling.
Even though Ballmer left Microsoft, the vast bulk of his wealth remains in company stock — $21.4 billion. He has $7.3 billion more in cash. It makes his stake in the Clippers seems paltry. He also has $450 million in Twitter shares. He owns a $14 million home in Hunts Point, Wash., and properties on Whidbey Island worth about $4 million.
•Susanne Klatten, Deputy chairwoman of Altana – Estimated net worth: $20 billion
Susanne Klatten, 54, the richest woman in Germany, can trace the source of her wealth to “the ultimate driving machine,” BMW. Her grandfather founded an industrial conglomerate that owned the German automotive company — and had a stake in its more staid rival, Daimler-Benz. The company also owned the chemical giant Altana. Her father, Herbert Quandt, took over the family businesses when his father died in 1954. When he died in 1982, Ms. Klatten received stakes in BMW and Altana, of which she is now the sole owner. As her father was credited with saving BMW from bankruptcy, she is credited with making Altana a top company in Germany. She is also chairwoman of the SGL Group, which produces graphite and carbon-fiber products.
Her wealth is tied up in her companies, with over half, or $12.1 billion, in the BMW Group. An additional 16 percent is in Altana, and 1 percent is in the SGL Group. She has 22.5 percent in cash. She has a family office that creates privacy around the breakdown of her wealth.
•Azim Premji, Chairman of Wipro – Estimated net worth: $10 billion
Azim Premji, 71, was born into the family that started Western India Vegetable Products, which produced hydrogenated oils. When Premji was at Stanford University, his father, who started the company, died, and he left college to take it over. At 23, he became chief executive. He diversified the Mumbai-based company’s offerings into soap and baby care products. In 1981, he ventured into information technology. The company boomed through the 1980s and ’90s, and in 2000 the renamed Wipro went public in New York. In 2009, Premji handed over the day-to-day running of the company. He devotes time to philanthropy, having given half his Wipro shares to a charity that supports education and health causes in India.
His wealth appears to remain fairly concentrated, with 64 percent of it in Wipro shares. An additional 13 percent is in a related company, Wipro Enterprises, and 20 percent is shielded by his family office. Public records show that he has a $20 million stake in JM Financial (about 0.2 percent of his wealth), $180 million in cash and $1 million in property in Mumbai. Given his total worth, his properties and holdings are probably much greater, but he has structured his wealth to protect his privacy.
•Carlos Alberto Sicupira,
Director of 3G Capital – Estimated net worth: $8.6 billion
Carlos Alberto Sicupira, who turns 69 this year, hails from São Paulo, Brazil, which ranks just behind New York City (where he keeps a residence) for the most billionaires in the Americas. He began his career in finance at Banco de Investimentos Garantia. He later served as chief executive of Lojas Americanas, a Brazilian shopping chain. He is a founder of 3G Capital, a private equity firm that has become known in recent years for partnering with Warren Buffett, the second-wealthiest man in the world, on deals like the acquisition of Heinz in 2013 and, two years later, its merger with Kraft.
Much of Sicupira’s wealth rests in a series of deals 3G did with breweries starting in 1999.
Source: The New York Times