x Abu Dhabi, UAEFriday 24 November 2017

Bi-weekly report on billionaires: The Russian who once took on two Moscow mobsters

While Tung Chee-hwa is topping up his billions, Africa's richest man has invested $4.6bn in Nigerian farming and the Jets owner tapped by Trump as the UK  Ambassador has joined the world's 500 richest. 

Dmitry Kamenshchik

Moscow mobsters were among the first to learn how difficult it can be to take something away from Dmitry Kamenshchik.

It was 1992, just after the Soviet Union collapsed, and the future billionaire was raking in cash by arranging international cargo flights for a new class of shuttle trader from a rundown airport on the fringes of Moscow. That’s when two thugs stormed Mr Kamenshchik’s office and demanded all of his money. Elena Tarshis, one of his first employees, will never forget what happened next.

“They put a gun to my son’s head,”Ms Tarshis said. Mr Kamenshchik, a black belt in a Burmese martial art, lunged at the attackers and together with a colleague “managed to disarm them", she said.

That survival instinct would serve the amateur stunt pilot well over the next quarter century as he battled the mafia and then Vladimir Putin’s legal system to emerge as the sole owner of Domodedovo Airport, one of Europe’s busiest hubs and the source of his $3bn fortune, according to the Bloomberg Billionaires Index. His next act is to try to reclaim the title of Russia’s biggest airport from Sheremetyevo, the main base of state-run Aeroflot, which is being renovated by billionaire Arkady Rotenberg, Putin’s old judo partner.

Mr Kamenshchik, 49, said in an interview that after spending $3.5bn over the last two decades to increase capacity 16-fold and lure airlines like Lufthansa and British Airways away from Sheremetyevo, he’s embarking on another $1.3bn expansion to double maximum traffic to 60 million passengers a year, about what Frankfurt Airport currently handles. None of this would be possible without an army of more than 100 in-house lawyers who’ve parried the thousands of legal claims he’s received from state bodies over the years.

“Domodedovo is probably one of the most audited enterprises in the country,” the hyper-focused bachelor said. “Our only way to survive is to carefully observe the law.”

Tung Chee-hwa

Former Hong Kong chief executive Tung Chee-hwa and his family will be about US$1 billion richer with the sale of their container shipping line to Cosco Shipping Holdings.

Mr Tung’s personal net worth will increase by about $400 million to $2.9bn, according to the Bloomberg Billionaires Index, based on the $6.3bn Cosco offered for his family’s Orient Overseas International. Mr Tung, 80, who was chairman of the business before becoming Hong Kong’s first leader during the British handover of sovereignty in 1997, owns 30 per cent of the company.

His younger brother Tung Chee Chen, Orient’s chairman and chief executive, holds a 39 per cent stake and will boost his wealth by $600m to about $3.8bn when the deal is completed. The state-owned shipping giant agreed to pay HK$78.67 for each Orient share, a 31 per cent premium over the closing price on July 7. The deal still requires approval from regulators and Cosco investors.

Mr Tung, currently a vice chairman of China’s top political advisory body, Chinese People’s Political Consultative Conference, was hand-picked by Beijing in 1997 for the top job in the financial hub and has been advising the central leadership on foreign policy, especially China-US relations.

The Tung family, which founded Orient Overseas Container Line in 1969, ran into financial trouble in the 1980s and needed more than $100m in additional funding that was arranged by Henry Fok, a pro-Beijing property tycoon. Mr Fok, who died in 2006, also played a key role in Beijing’s selection of Tung as Hong Kong’s first leader under Chinese rule.

Aliko Dangote

Dangote Group, controlled by Africa’s richest man, Aliko Dangote, plans to invest $3.8bn in sugar and rice and $800m in dairy production in the next three years as the company seeks to expand and deal with a shortage of dollars in its home market of Nigeria.

The conglomerate plans to increase its production of sugar to 1.5 million metric tonnes a year by 2020 from 100,000 tonnes now and is seeking to add 1 million tons of rice, Edwin Devakumar, the executive director at Dangote’s industries unit, said. The company also plans to have 50,000 cattle producing 500 million litres of milk a year by 2019, he said.

A lack of foreign exchange means companies are struggling to pay for imported goods, increasing the burden on local agriculture to meet demand for food from Nigeria’s population of more than 180 million, Mr Devakumar said. “All raw sugar has to be imported today, same thing for flour milling."

Dangote, whose cement unit is Nigeria’s biggest listed company, has been investing in agriculture as the country’s government seeks to diversify away from oil, which accounts for 90 per cent of the nation’s export earnings and the bulk of revenue. The economy, which plunged into its first recession in a quarter-century last year amid falling crude prices, is forecast by the World Bank to expand by 1.2 per cent this year.

The company has established Dangote Rice and will list the unit on the Nigerian Stock Exchange “at the appropriate time,” Mr Devakumar said.

The Lagos-based company will finance the projects through “internal resources or equity funding” and loans from banks and export-credit agencies, Mr Devakumar said. The funds will be used mainly to procure “farm-development equipment” as well as sugar and rice mills, he said.

Aliko Dangote, 60, has a net worth of $12.1bn, according to the Bloomberg Billionaires Index. That ranks him just within the top 100 worldwide.

Robert Johnson IV

Robert "Woody" Johnson IV, nominated to be the US ambassador to Great Britain, now ranks among the world’s 500 richest people and is poised to join a growing list of billionaires on president Donald Trump’s team.

The Johnson & Johnson heir and New York Jets owner has a net worth of $4.2bn on the Bloomberg Billionaires Index following an analysis of his financial disclosure to the US Office of Government Ethics as part of his nomination. Other billionaires in Trump’s administration include commerce secretary Wilbur Ross and Linda McMahon, who heads the Small Business Administration. Mr Johnson, 70, is awaiting senate confirmation.

His disclosure, dated March 7 and certified by the ethics office on June 27, lists more than 1,100 stocks, bonds and other securities, including more than $50m in cash in a BankUnited account, a stake in the All Weather fund run by billionaire Ray Dalio and dozens of personal trusts and holding companies.

Based on the midpoint of value ranges indicated for each asset, Mr Johnson probably has more than $1.7bn in assets unrelated to his ownership of the Jets and about $233m in liabilities. He also lists more than $50m in shares of New Brunswick, New Jersey-based J&J, the health-care products company cofounded by his great-grandfather. Based on listed dividend income from the past 12 months of "over $5m," Johnson would have at least 1.56 million shares in the company. That holding is worth more than $205m at Monday’s closing price.

The majority of his wealth is tied to the Jets, his National Football League franchise, which the billionaire purchased for $635m from the estate of Leon Hess in 2000. Today the team is conservatively valued at $2.7bn, according to a July valuation opinion by Peter Schwartz, a consultant with Anderson Economic Group. The team and its stadium interest are both listed in the disclosure as being worth "over $50 million" — the highest value field required by the document.

"Although football had a down year compared to its own lofty standards, the value of teams still rose generally across the board based on increased revenue generation and the power of the NFL-branded media deals," Schwartz said in a phone interview. Johnson earned more than $81 million in income in the past year from the team and its ownership stake in MetLife Stadium in East Rutherford, New Jersey, which it shares with the NFL’s New York Giants.

Michael Platt

Billionaire Michael Platt’s BlueCrest Capital Management posted a gain of about 30 per cent in the first half of the year, according to a person with knowledge of the matter, who asked not to be identified because the details are private.

The boon extends a run of high returns since BlueCrest announced plans in late 2015 to give back client money — about $7bn of the $8bn it managed. The fund had a gain of almost 50 per cent last year, a separate person familiar with the matter said in January. A spokesman declined to comment on the returns.

The performance at BlueCrest, which trades with high levels of borrowed capital, contrasts with losses at some of the world’s largest hedge funds. Andrew Law’s Caxton Associates lost 10.4 per cent in the first six months of the year, while Brevan Howard Asset Management’s main hedge fund suffered its worst loss for a first half since it began trading in 2003, dropping 5.2 per cent, according to separate people familiar with the returns.

Investors put a net $23.3bn into hedge funds in the first five months of this year after pulling $112bn in 2016, according to eVestment.

BlueCrest, once one of Europe’s three largest hedge funds, enjoyed rapid growth in the aftermath of the 2008 financial crisis when it outperformed competitors. Its fortunes turned amid faltering returns and investor concerns about potential conflicts of interest at an internal fund run for employees.

Mr Platt has a net worth of $1.9bn, according to the Bloomberg Billionaires Index.