Andrew Heathcote Rich Lists editor

Andrew is BRW's Rich lists editor and is responsible for the Rich 200 and Young Rich flagship issues. He also reports on matters relating to wealth and investment for BRW and The Australian Financial Review.

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Rich 200 2012: A tale of two lists

Published 24 May 2012 00:01, Updated 24 May 2012 00:06

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Rich 200 2012: A tale of two lists

Having topped the BRW Rich 200 for the first time in 2011, Gina Rinehart has achieved an even bigger feat this year and become the richest woman in the world.

The $18.87 billion increase in her wealth is unparalleled. It is a product of foreign investment in new projects, increased production and a recovery in the iron ore price over the past six months.

If the demand for natural resources remains strong, additional multi-billion mines are almost inevitable. There is a real possibility that Rinehart will become not just the richest woman in the world but the richest person in the world.

To do so she would have to pass reigning title holder, the Mexican telecommunications mogul Carlos Slim Helu ($69.77 billion). It may sound far-fetched but a $100 billion fortune is not out of the question for Rinehart if the resources boom continues unabated.

The acrimonious dispute between Rinehart and her children won’t help but so far this has been more of a distraction than a serious impost on her personal wealth.

As Adele Ferguson explains in “Top of the world”, Hancock Prospecting shares have no value to Rinehart’s children on secondary markets even if they take ownership of their entitlement under the family trust. What they want is a fairer distribution of dividends. The matter remains before the courts.

Rinehart’s $29.17 billion fortune surpasses that of previous richest woman in the world, Christy Walton ($25.59 billion). She is the widow of John Walton and has a major stake in US retail giant Walmart.

Unlike many wealthy heirs or heiresses, Rinehart has not just maintained her fortune but turned it into a much larger one. She debuted on the Rich 200 following the death of her father Lang Hancock in 1992 with a net wealth of $75 million.

The vast quantum of her wealth is highlighted by the impact she has on the total wealth statistics. When Rinehart’s fortune is included, the Rich 200 increased their overall wealth by 8.4 per cent over the past 12 months to $181.2 billion. When it is excluded, overall wealth fell by 3.1 per cent.

GRAPHIC: STATE BY STATE: WHERE THE 2012 RICH 200 LISTS MEMBERS LIVE

Consider this statistic: Rinehart’s wealth is approximately equal to the wealth of the bottom half of the list. Those ranked between 101 and 200 have total wealth of $29.34 billion.

In all, it has been a difficult year for most of the Rich 200. Of the returning members, 80 increased their wealth while 104 suffered a fall. Three were unchanged and the rest were newcomers. A debutant last year, Ivan Glasenberg holds second spot on this year’s Rich 200 despite his wealth falling to $7.40 billion from $8.80 billion. The decline in the share price of global commodities trading firm Glencore since its listing 12 months ago is to blame.

The Westfield Group’s Frank Lowy rises to third. Some keen investigative work uncovered additional assets, which helped push his wealth to $6.47 billion from $4.98 billion.

Mining magnate Andrew Forrest who attracted headlines over his objections to the mining tax has fallen to fourth from third. His wealth is down to $5.89 billion from $6.18 billion, largely a product of the Fortescue Metals Group’s share price. Visy boss Anthony Pratt is fifth after being forth last year. His wealth, which includes some attributed to family members, is $5.45 billion, up from $5.18 billion.

Ebullient mining entrepreneur Clive Palmer falls to eight from fifth position on a decline in his wealth to $3.85 billion from $5.05 billion. Although Palmer says he has a “had a good year”, the failure of his Resourcehouse float soon after last year’s Rich 200 was published forced a downwards revision of his valuation.

The wealthiest newcomer this year is Graham Tuckwell. He is the founder and chairman of ETF Securities, a London- and Jersey-based company that provides access to exchange traded funds.

The relatively low number of newcomers and re-entrants on the list this year says much about the state of the economy. The ability of the rich to maintain their wealth when others around them are suffering falls also makes entry to the list difficult. The cut-off for inclusion this year is $210 million, down a modest $5 million on last year’s mark.

The rise in the number of Rich 200 members to make most of their money from property perhaps also points to volatility in equity markets. Although the property market has had its own problems, it remains a relatively safe way to mind money in a downturn.

TABLE: 2012 BRW RICH 200 LIST MEMBERS BY INDUSTRY

The number of resources barons on the list falls this year despite the rapid growth in Rinehart’s resources-led personal wealth. The total is down to 22 from 28 but this underestimates the practical impact to some degree. Glasenberg is listed in the investment category for the purposes of BRW’s research (as are 20 others) but the has been a major beneficiary of the upswing in mining activity over the past decade.

The Smorgons retain top spot on the Rich 50 families list. The Melbourne-based family is worth an estimated $2.63 billion, down from $2.69 billion last year.

The Rich 200 remains largely a man’s domain. Just 16 women make the list, up from 15 last year. Many of them are wives of primary wealth creators.

Not so the new entrant. Although Therese Rein’s husband is a former prime minister of Australia (Kevin Rudd) it is her entrepreneurial skill in the employment services industries that has led to her $210 million fortune.

The list, like all of us, is getting old. The average age is 65 and only two are under 40. They are Nathan Tinkler, whose wealth falls to $915 million from $1.01 billion, and Hezi Leibovich who debuts on the list alongside his brother Gabby Leibovich. The online retailers have a combined fortune of $240 million.

Another debutant, property developer Ashley Williams is 41.

Although the individual wealth record has been smashed this year, some records look unlikely to be broken. John Singleton retains the title of the most married Rich 200 member of the list (he has tied the knot six times) and Joseph Gutnick has the most children (11).

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