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Friday, Aug 19, 2022

Wealthiest Angelenos: LA’s Top 50 Billionaires Hold ‘Massive’ Net Worth

 Although Elon Musk packed up and moved to Texas last year, he still has an outsized impact on this year’s Business Journal list of the 50 Wealthiest Angelenos.

The departure of Musk, who ranked No. 1 on the Wealthiest list with a fortune of $75 billion in 2020, means the overall net worth of L.A.’s most exclusive club declined to $250 billion in 2021, a 13% drop from $288 billion last year.

While that’s a substantial falloff, it could have been much steeper if the city’s remaining billionaires hadn’t managed sizeable gains in their respective portfolios.

Thanks to double-digit increases by the stock market and a resurgent economy, the collective net worth of the richest men and women in Los Angeles — excluding Musk — rose 17.4% in 2021 when compared to the group’s $213 billion in 2020. The same group’s overall wealth rose 26% from $198 billion in 2019, the year before the pandemic arrived.

Even without Musk’s money, the amount of wealth in Los Angeles is staggering, according to Jeff Markham, division executive for Merrill Lynch’s wealth management division for the western United States.

“I think the No. 1 differentiator here is the sheer scale and how massive it is,” Markham said. “You can find communities where their wealth is growing faster, but it’s a fraction of the size of L.A. and the greater L.A. area.”

The new No. 1 atop the Wealthiest Angelenos list is a familiar face. Patrick Soon-Shiong, who held the top spot in 2018 and ranked No. 2 behind Musk in 2019 and 2020, is again the leader of the pack.

Although his net worth of $20.4 billion in 2021 marks a decline from his total of $21.8 billion in 2020, Soon-Shiong still holds an edge of nearly $4 billion over the next closest billionaire, Sean Parker.

Soon-Shiong, a 69-year-old Brentwood resident who owns the Los Angeles Times and holds a minority stake in the Los Angeles Lakers, saw his net worth slip 6% in recent months due to his positions in his publicly traded biotech companies, ImmunityBio Inc. and NantHealth Inc.

The value of his ImmunityBio stake tumbled by $8.6 billion between March 10, the company’s first day of trading as a newly merged entity, and Aug. 2. And the value of his NantHealth stake plunged by $110 million for the 12-month period that ended July 15.

Parker makes gains

Parker, meanwhile, saw his fortune climb over the past year.
The town’s new No. 2 billionaire, a tech pioneer who created Napster and was an early investor in Facebook Inc. as well as Spotify, clocks in with a fortune of $16.9 billion, up 16% from $14.5 billion last year.

Although there was some speculation Parker might follow Musk’s example and leave L.A., a confidential source said Parker’s main residence remains the mansion along Mapleton Drive in Holmby Hills that he acquired from Ellen DeGeneres for $55 million in 2014.

While Parker has other options to call home — including a house with a panoramic view of San Francisco Bay in the city’s breezy Seacliff neighborhood and a palatial abode he built in the heart of New York’s Greenwich Village — he remains focused on L.A., where his children are enrolled in school, according to the same source.

Longtime entertainment executive David Geffen comes in at No. 3 on this year’s list with $14.2 billion, while veteran technology entrepreneur John Tu ranks No. 4 with $11.1 billion.

The Wealthiest Angelenos list suffered a big loss this year when businessman and philanthropist Eli Broad died in April at the age of 87.

Broad used his immense fortune to inject life into L.A.’s cultural scene. His wife, 85-year-old Edythe Broad, shared Eli’s passions and now continues the couple’s good works and oversees their billions of dollars.

Over the past year, the Broads’ wealth has grown to $9.2 billion, up from last year’s $7.9 billion. That secures Edythe the No. 5 spot on this year’s list.

Eli Broad’s philanthropic legacy will live on thanks largely to the foundation that he and Edythe established with a $2 billion endowment.

Rounding out the top 10 on this year’s Wealthiest list are real estate developer Edward Roski Jr. at No. 6 with $8.7 billion; airplane leasing industry executive Steven Udvar-Házy at No. 7 with $8 billion; 33-year-old Snap Inc. executive Bobby Murphy at No. 8 with a fortune of $7.9 billion; agribusiness titans Stewart and Lynda Resnick at No. 9 with $7.2 billion; and Snap CEO Evan Spiegel , the youngest member of the top 10, at No. 10 with a fortune of $6.7 billion.

Both Murphy and his Snap co-founder Spiegel, rode a remarkable runup in their social media company’s stock over the past year to make impressive strides on the Business Journal list.  

Billionaires post big gains

The overall growth in wealth by Los Angeles-based billionaires reflects the gains by American billionaires in general, according to an analysis conducted by Inequality.org, a project measuring billionaire wealth for the Washington, D.C.-based think tank Institute for Policy Studies.

Over the last 16 months, the combined wealth of the nation’s 713 billionaires has surged by $1.8 trillion, a gain of almost 60%, according to Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies.

The total combined wealth of U.S. billionaires increased from $2.9 trillion on March 18, 2020, to $4.7 trillion on July 9, 2021.

Billionaire wealth has steadily increased since 1990, Collins observed, but one-third of those gains has occurred during the pandemic.

The gains in the L.A. market are not surprising, according to Brad Larsen, who serves as market executive for Los Angeles, Ventura and Santa Barbara counties for Bank of America Private Bank, a wealth management division within North Carolina-based banking giant Bank of America Corp.

‘New money center’

“L.A. has kind of become the new money center,” Larsen said. “The number of people who are actually wealthy is at 112,000 individuals with $3 million or more in investable assets here in L.A. In 2010, it was 52,000 people.”
“Last year, we did $1.2 billion in mortgages, and our average loan size was around $9.4 million,” he added. “They’re not just coming in for mortgages. I mean it’s a range of other asset opportunities because we’re doing commercial real estate loans, we’re managing their investments and doing estate planning. We’re doing multiple things for them.”

Had Musk not bolted to Texas, this year’s Wealthiest Angelenos list could have reached $424.9 billion — assuming Musk’s current $177 billion net worth estimate by Forbes is accurate — a 72% increase from last year’s $288 billion total for the list.

Despite the year-over-year decline in this year’s list, the price of admission in the 2021 edition is up. Last year, the entry point for the top 50 was $1.2 billion. This year, because of a variety of shifting elements, including a rising stock market, the floor is $1.4 billion.

Gains over the past year have not been uniform. Billionaires whose fortunes are tied to areas like technology and private equity have logged significant boosts to their net worth.

The tech-heavy Nasdaq exchange rose roughly 41% between August 2020 and the same month this year, while the Dow Jones Industrial Average rose 32.8% and the S&P 500 climbed 35.1%

Among the newcomers on this year’s list are Clearlake Capital Group co-founders Behdad Eghbali and José Feliciano, tied for No. 28 on the list with $3 billion each.

Clearlake Capital’s co-managing partners are collecting new industries at a head-turning speed. The private equity firm’s merger and acquisition activity has accelerated in recent months as the Covid-19 pandemic has begun to recede in many parts of the country.

Clearlake Capital is a poster child for the uptick in dealmaking. The firm ranked No. 5 with $20 billion in assets under management on the Business Journal’s most recent list of largest private equity firms in L.A. As of this month, the firm managed $39 billion, surpassing Beverly Hills-based Platinum Equity’s $25 billion and Century City-based Kayne Anderson Capital Advisors’ $34 billion.

About the Wealthiest List

Business Journal editors and reporters spend months conducting research and checking data to compile the annual Wealthiest Angelenos special issue.
Extensive reporting is required to ensure the most accurate possible information is provided for each candidate for the Wealthiest list.

A lengthy process then takes place to determine which billionaires qualify for the list and to see where exactly they rank in the top 50.

Some of that information is supplied directly by the individuals or members of their teams. Data is also collected through public filings and documents, as well as through conversations with experts in
relevant fields.

The Business Journal’s calculations for the list are based on a range of factors, including each billionaire’s holdings in stocks, bonds, private equity, venture capital, real estate, art and more.
All members of the Wealthiest Angelenos list must reside in Los Angeles County.

Keep reading the 2021 Wealthiest Angelenos special edition.


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