When the economic downturn struck in 2008, John Tu’s personal worth went into free fall. The co-founder of memory chip maker Kingston Technology Co. saw his net worth drop nearly $2 billion in one year as slowing demand for computers cut into his company’s revenues.

But it has taken only two years for that number to swing wildly back. This year, Kingston’s revenues soared more than 50 percent. The Business Journal calculates Tu’s value has jumped 45 percent to $2.9 billion, his highest valuation ever.

He isn’t alone. For some of the wealthiest people in Los Angeles, the past year was the moment when they made up all their losses from the downturn.

William Barron Hilton, who sold off his family hotel empire in 2007, suffered nearly $600 million in investment losses in 2008. This year, he was up 28 percent thanks to the comeback in equities and other investments, and has exceeded the $2.3 billion he was valued at three years ago by $200 million.

David Whitmire Hearst Jr. and George Randolph Hearst Jr., grandchildren of legendary publisher William Randolph Hearst, lost $350 million apiece during the downturn. But the recovery in media advertising caused their holdings to jump 20 percent. The Business Journal now values each at $1.8 billion – higher than what they were worth three years ago.

Such rebounds reflect a wide-ranging economic recovery across multiple sectors, said Lon Morton, chief executive of Calabasas-based Morton Capital Management.

“I think most everybody that I’ve seen has not only made it back, but is up beyond where they might have been prior to the collapse,” he said.

In all, the cumulative wealth of L.A.’s 50 wealthiest residents rose 15.7 percent in the past year to $108 billion. That figure is up from $81.7 billion two years ago and within throwing distance of the predownturn $114 billion tallied in May 2008. The number of billionaires jumped from 31 to 39, equal to the number from three years ago. It also marked the first time since the downturn that the average wealth of a person on the list broke $2 billion.

Biotech entrepreneur Patrick Soon-Shiong topped the list for the third straight year with a net worth that was up 10 percent to $7.8 billion.

Riding high on stocks

The recovery among the wealthy was fueled in part by the stock market’s strong rebound. The S&P 500 index rose nearly 15 percent in the past year.

“We have seen a lot of wealth get back to where it was before the downturn or a little bit higher, and that couldn’t have been possible had it not been for participation in the stock market again,” said Brad Levin, president of Legacy Wealth Partners, a Woodland Hills boutique wealth planning firm that services high-net-worth individuals.

Media companies in particular saw large gains. Media magnate Sumner Redstone’s shares in both Viacom and CBS rose more than 50 percent, boosting his net worth from $2.95 billion to $4.2 billion, good enough for No. 6 on the list. It marked a dramatic comeback for Redstone, who lost more than $5 billion during the recession and was on the hook for an additional $1.6 billion to creditors, threatening his media empire.

Shares of Walt Disney Co. rose more than 20 percent, to the benefit of second largest shareholder and former Chief Executive Michael Eisner, whose value rose to $850 million, compared with $780 million three years ago.

Elsewhere in the media landscape, the recovery in advertising dollars helped push the value of Univision Communications co-owner Haim Saban up 17 percent to $3.7 billion. Univision remains privately owned, but there has been talk in the industry that Saban is preparing for a public offering next year.

Telecommunications stocks have also been robust, landing former Qualcomm Inc. board member Neil Kadisha in the billionaires club for the first time this year. His 14 million shares in Qualcomm appreciated more than 50 percent, helping raise his net worth $140 million to an even $1 billion. Residential landlord Donald Sterling also told the Business Journal his investments in telecom stocks are paying off, while private equity firm owner Alec Gores said he is looking at the telecom industry for future investments.

The healthy stock market also contributed to strong returns for the diversified portfolios of Eli Broad, who moved up to No. 2 on the list with a net worth of $6.3 billion, and Marc Nathanson, who said his investments outside of real estate were up 9 percent. Financier Michael Milken pocketed profits when he sold off $134 million in shares of educational product maker LeapFrog Enterprises. David Murdock enjoyed a 10 percent return on his sizable holdings of Dole Food Company Inc.

“You could have bought pretty much anything and done well in the last year,” Morton said.

Aggressive moves

What are people doing with their newly boosted capital? If you’re Soon-Shiong, you invest with abandon. He has thrown cash at Internet and medical technology startups, depressed real estate and even bought Magic Johnson’s 5 percent stake in the Los Angeles Lakers last year. In October, he sold off his company Abraxis BioScience for a cool $2.9 billion, netting more than a half-billion dollars in the deal.

“Ultrahigh-net-worth investors in many cases tend to be at that level because of being more comfortable as risk takers,” Levin said. “They’re more ready to take advantage of opportunities they can spot.”

Soon-Shiong isn’t the only one making bold moves. Aircraft leasing titan Steven Udvar-Hazy, whose former company International Lease Finance Corp. was a subsidiary of insurance giant AIG, lost more than $2 billion when AIG cratered three years ago. In 2009, he left the company he had built into an industry giant to start a competitor, Air Lease Corp. Its successful IPO last month, and his stock portfolio’s continued appreciation, boosted him 30 percent to $2.4 billion.

The big bets haven’t all paid off. The billionaire who suffered the worst blow this year might have been Alfred Mann, another biotech entrepreneur, who has spent years and more than $1 billion developing an insulin inhaler called Afrezza. In January, the Federal Drug Administration announced it wouldn’t approve Afrezza without further clinical trials, potentially delaying the product two more years. His company’s stock has dropped more than 50 percent since the announcement.

While some of the area’s richest residents are doubling down, a couple of the oldest members on the list are winding down. Investor Kirk Kerkorian announced he’s resigning from the MGM board next month and sold off $400 million in stocks last year. The 93-year-old slid from No. 2 to No. 3 on the list due to declining shares at MGM Resorts International and Delta Petroleum.

Also putting the brakes on is 87-year-old Berkshire Hathaway Vice Chairman Charles Munger, who dropped more than anyone else on the list. Munger’s net worth fell more than 40 percent to $1.1 billion, after he transferred nearly half his Berkshire stock to a family trust following the death of his wife in February.

Others who suffered losses last year include Mercury Insurance Group founder George Joseph and DreamWorks Animation Chief Executive Jeffrey Katzenberg, who both dropped due to double-digit stock losses at their respective companies.

Real estate steady

Most of the real estate players on the list saw continued appreciation of their holdings, which tended to be in prime locations with Class A tenants, but overall gains were smaller than in other sectors of the economy.

Apartment buildings have been particularly strong since the downturn. In the last two years, Alan Casden and Donald Sterling, two of the biggest names in multifamily residential, have each added around a half-billion dollars to their worth. Mall developer Rick Caruso cracked $2 billion on the list for the first time this year, riding increasing sales at his two major properties, the Grove and Americana at Brand. Industrial developer Ed Roski Jr. made modest gains despite a flat year in the industrial real estate market.

Caruso and Sterling have been looking to expand. Caruso has plans for a 140,000-square-foot expansion of the Americana, and in February announced a growth program designed to double portfolio size over the next five years. Sterling said that he purchased five properties in the past year.

“There are no permits, no construction, nothing really going on, and people are just pouring into Los Angeles, especially into the Mid-City area and to West Los Angeles,” he said.

One developer that showed hints of trouble was Robert Maguire. Maguire’s 900-acre Solana business park in Westlake, Texas, is threatened with foreclosure. Maguire told the Business Journal he has not missed any payments, and is in the process of restructuring the loan, reported to be $395 million.

Philanthropy down

L.A.’s wealthiest residents are also some of its biggest philanthropists, so one would think that the big gains – along with the extra attention brought by Warren Buffett and Bill Gates’ Giving Pledge campaign – would have led to an increase in charitable giving last year.

But Maria Di Mento, who conducts an annual survey of top philanthropists at the Chronicle of Philanthropy, said donations among large donors was down significantly last year – the lowest amount, in fact, in the survey’s 12-year history.

Broad was the only person on the Business Journal’s list to also be named one of the country’s top 50 donors last year by the Chronicle of Philanthropy.

But Di Mento has already seen an uptick this year. In addition, at least six people on the Business Journal’s list – Broad, Soon-Shiong, Hilton, Mann, Milken and former eBay President Jeffrey Skoll – signed up for the Giving Pledge, in which billionaires commit to donating a majority of their wealth.

That could have a positive effect, although it’ll be years before its influence is seen.

“It took a little bit of time for wealthy people to pull back in their giving,” Di Mento said. “2010 was when we really saw the true effects on big donors from the recession that started in 2008.”

Calculating Wealth

The Business Journal calculates the net worth of L.A.’s wealthiest residents by first sending a questionnaire to candidates asking for details on their portfolio, including public stock, real estate, private equity and debt. Some deny our request and ask to be removed from our list. Others provide detailed information, some on the record, some off.

Reporters check and value holdings using public records when available. For those that disclose holdings, valuations are double checked when possible.

Substantial stock holdings are often disclosed in the Securities and Exchange Commission filings. For privately held wealth, estimates can often be obtained by comparing valuations of comparable public companies. We also rely on expert opinions from wealth managers, real estate brokers and consultants with specific knowledge of an industry.

Many of the final numbers are accurate, but it is difficult to obtain more than an estimate for a minority who have private holdings and refuse to cooperate in the process.

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&#8226 View the full Wealthiest Angelenos 2011 list ranked by net worth

&#8226 View the full Wealthiest Angelenos 2011 list ranked by changes in net worth.