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Monday, May 29, 2023


How does the Business Journal come up with the names of the 50 richest Angelenos, and how can their net worth be determined?

It’s a massive, months-long project that involves researching public documents, company records, Wall Street data and previously published accounts. It also involves countless interviews with local experts in finance, law, accounting and money management as well as those who actually make the list (when they agree to be interviewed).

Some of the candidates are perennial shoo-ins, like Rupert Murdoch, Marvin Davis, David Geffen and Eli Broad. Those and others in the $1 billion-plus class are not likely to see their net worth fall off a cliff; if anything, the stock market gains of the past year have only inflated their already rich numbers.

Another identifiable group consists of those with a large equity stake in a public company. One example is George Joseph, whose net worth is largely concentrated in Mercury General, the insurance company he founded. Mercury’s stock has soared in the past year.

For those who made most of their money in privately held companies or in diversified financial vehicles the process is trickier. In those cases, a number of approaches are taken: Determining, when possible, the current market value of their companies (based on multiples of cash flows or sales), calculating the value of real estate holdings, or interviewing sources with knowledge of the person’s individual investments.

There are cases where determining net worth is, inevitably, a judgment call. And as a rule, the larger the net worth, the more variable the figure. A good example is Davis, whose net worth fluctuates because of his diversified holdings.

When the wealth of someone could not be confidently determined even it was believed to be over the $500 million threshold the person was dropped from the list.

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