These are Los Angeles residents who easily can pay cash for an overpriced hacienda. But the subprime mortgage mess that triggered last year’s credit crisis and this year’s budding recession took its toll on the county’s 50 Wealthiest Angelenos.
Take master dealmaker Kirk Kerkorian, who tops the Business Journal’s list for the fourth year with an estimated net worth of $10.6 billion. Kerkorian’s assets jumped 73 percent in 2006 largely due to his MGM Mirage holdings; he saw that stake’s value sliced in half and his net worth fall 34 percent as a sputtering economy slowed the resort and casino business.
Weaker ad spending by recession-cautious businesses also bedeviled the fortune of media mogul Sumner Redstone, who has controlling stakes in CBS Corp. and Viacom Inc. Redstone, No. 2 on the list, saw his net worth fall 17 percent to $7 billion.
Overall, this year’s 50 wealthiest county residents had a total net worth of $113.8 billion. That’s down 5 percent from a year ago and comes after successive years of big increases in total wealth. Only 10 list members had double-digit percentage gains in net worth, compared with two dozen a year ago.
The remaining top 10 on the list managed to maintain or increase the value of their assets, albeit by single-digit percentages. Tech entrepreneur John Tu’s had a remarkable 145 percent gain in 2007, but the greatest percentage increase this year was by commercial real estate developer Rick Caruso. The owner of the well-known Grove shopping center in Los Angeles’ Fairfax District saw his net wealth shoot up 42 percent to $1.7 billion with this month’s opening of an even more upscale shopping mecca in downtown Glendale, Americana at Brand.
William Barron Hilton fared well, as the sale of the family’s iconic hotel company lifted his net worth 15 percent to $2.3 billion, moving him up 20 places to No. 18.
Like Kerkorian, a significant drop in a major holding was enough to shave a noticeable amount from several on the list. Trust Company of the West founder Robert Addison Day, who sold a controlling interest to Soci & #233;t & #233; G & #233;n & #233;rale S.A. a few years ago, saw the value of his SocGen stock plummet in January after subprime holdings and a rogue trader cost the bank billions.
A variety of largely subprime-related challenges at New York-based AIG, whose stock is trading near a 10-year low, caused headaches for billionaire entrepreneurs Eli Broad, Steven Ferencz Udvar-Haz, and father-son Louis and Leslie Gonda.
The economy can’t be blamed for every reversal in fortune. Roy Disney, who plowed his share of uncle Walt Disney’s fortune into a successful investment business, barely made this year’s list after the finalization of his divorce settlement with Patricia, his wife of 53 years.
Oaktree Capital Management LLC founders Howard Marks and Bruce Karsh join the list this year in the No. 29 and 30 spots, both estimated to be worth $1.8 billion. Marks is chairman of the “distressed assets” investment company. Partner Karsh serves as portfolio manager.
Rounding out the newcomer list is Marc Nathanson, (No. 42) who grew his Falcon Communications into the nation’s 10th largest cable television operator before selling to Charter Communications. Nathanson now heads his own private investment.
Cogent Inc. Chief Executive Ming Hsieh, who was last on the list last year, fell off as shares of his technology company continued to slide. Another absence is Public Storage Inc founder Bradley Wayne Hughes, No. 16 on last year’s list. The race horse owner moved from Malibu to Kentucky.
Merv Griffin, who became a billionaire by parlaying profits from his talk and games shows into real estate, died of cancer in August at age 82.
