The economy may be sluggish and the markets volatile, but the outlook is definitely brightening for L.A.’s wealthiest residents.
After suffering through their worst year on record during the financial crisis, the 50 Wealthiest Angelenos rebounded this year, adding nearly $12 billion to their collective net worth. The number of billionaires on the Business Journal’s annual list rose to 31, the first year-over-year increase since 2007.
One billionaire seemingly immune from the turmoil is Patrick Soon-Shiong, who ranked as L.A.’s richest for the second straight year. The former surgeon shot to No. 1 a year ago thanks to the sale of drug maker APP Pharmaceuticals Inc., which netted him $3.7 billion. This past year, the biotech entrepreneur pushed his wealth to an eye-popping $7.1 billion through savvy real estate deals and securities investments.
Hot on his heels is Kirk Kerkorian, who ranks perennially among the city’s wealthiest. His net worth is still off considerably from its prerecession high, but Kerkorian landed at No. 2 thanks to gains in his large MGM Mirage stock holdings. The gaming tycoon is worth an estimated $6.3 billion.
Like Kerkorian, some of the biggest gainers simply sat back and watched their holdings increase in value. Investor Charles Munger, with 13,000 shares of Berkshire Hathaway, gained $300 million since last year. Insurance executive George Joseph’s wealth rose $300 million, too, thanks to his Mercury General stock.
Meanwhile, media mogul Sumner Redstone, one of the biggest losers last year, made $1 billion in the past year thanks to his CBS Corp. and Viacom Inc. shares. Redstone’s net worth was a shade under $3 billion, pushing him up six spots to the No. 8 ranking.
Redstone’s comeback, though, was overshadowed by the even more impressive rise of tech mogul John Tu. The co-founder of memory chip maker Kingston Technology saw his net worth jump 150 percent to $2 billion – and his ranking improve 17 spots to No. 14 – as his company’s revenue soared.
Not everyone fared so well, though.
David Murdock, whose net worth declined by $800 million over the past year, was one of just five people on the list to lose money. The chairman of Dole Food Co. Inc. was hurt by his company’s disappointing initial public offering and heavy debt load.
Other losers include Barbara Davis, widow of wildcatter and studio head Marvin Davis. Her wealth declined by an estimated one-third to $490 million given family infighting and no indication of wealth building.
But one of the real albatrosses during the recession – real estate – has turned out to be something of a cash cow in the nascent recovery. Rick Caruso, Alan Casden and Peter Lowy are among developers who benefited from a rise in values.
At the same time, investors are reaping big profits by acquiring distressed commercial real estate loans, including Thomas Barrack Jr., chief executive of Santa Monica investment firm Colony Capital. With a net worth of $1.1 billion, Barrack made the list for the first time after revealing to the Business Journal that his primary residence is in Los Angeles.
Construction kingpin Ronald Tutor returned to the list after a several-year absence following the merger of his private contractor with a public company.
Dropping off the list were actor-director Mel Gibson, who is in the midst of divorce, and Jeff Greene, who moved to Florida
Steven Udvar-Hazy, who made his fortune in aircraft leasing, ranked higher than expected. Udvar-Hazy was believed to have lost billions in financial stocks but revealed publicly that he sold the shares before prices collapsed. His 2009 net worth was adjusted upward accordingly, and his 2010 net worth increased modestly to $1.85 billion.
• View the full Wealthiest Angelenos 2010 list ranked by net worth.
• View the full Wealthiest Angelenos 2010 list ranked by changes in net worth.