Buffett Passes Gates as Richest Person, Forbes Says
Thursday, March 6th, 2008March 6 (Bloomberg) — Berkshire Hathaway Inc. Chairman Warren Buffett beat out Bill Gates for the top spot on Forbes magazine’s annual list of billionaires worldwide, ending a 13- year reign for Microsoft Corp.’s co-founder.
Buffett’s wealth increased $10 billion to about $62 billion in the 12 months through Feb. 11, mostly from a gain in his company’s shares, Forbes said in a statement released yesterday.
“He is the iconoclastic investor of his generation,” said Ken Murray, who runs Blue Planet Investment Management in Edinburgh, which oversees about $250 million in financial stocks. He doesn’t hold Berkshire. “The fantastic amount of wealth he has accumulated puts him up there with Carnegie and Morgan.”
The fortune of Gates, 52, rose $2 billion to $58 billion. The Microsoft chairman fell to third on the list behind Mexican telecommunications mogul Carlos Slim, 68, who has an estimated net worth of $60 billion.
Forbes’s list shows wealth expanding in emerging markets around the globe, with Russia overtaking Germany as the second- richest country in terms of billionaires, and 70 percent of newcomers from Russia, India, China and the U.S. In 2006, half of the top 20 billionaires came from the U.S. This year there were only four Americans.
Buffett, 77, is the biggest holder of Berkshire Hathaway’s stock with about 32 percent of the Class A shares as of July and 18 percent of the Class B shares as of Dec. 31, according to Bloomberg data.
4,700 Percent
The company’s Class A shares rose 28 percent in the 12 months ended Feb. 11. They now sell for $139,000 each, the most expensive on the New York Stock Exchange. The S&P 500 declined 6.9 percent in the period.
Berkshire shares rose 4,700 percent in the 20 years through the end of 2007, six times more than the Standard & Poor’s 500 Index, dividends included.
“Warren Buffett is a great example of an extremely smart investor who has stayed loyal to his valuation discipline,” said Simon Carter, who manages $3 billion at Aegon Asset Management in Edinburgh. “By taking advantage of the markets’ preoccupation with short-term issues during downturns, he has systematically reinvested his cash at very attractive rates of return over his entire career.” Aegon doesn’t disclose its investment holdings.
A year ago, in his annual letter to investors, Buffett said his method was to “be fearful when others are greedy, and be greedy when others are fearful.”
Greed and Fear
Berkshire Hathaway has a market value of $215 billion, ranking it 10th among the 500 largest companies by that measure, according to Bloomberg data.
Buffett built Omaha, Nebraska-based Berkshire Hathaway during the past four decades by investing premiums from insurers such as Geico Corp., National Indemnity Co. and General Reinsurance Corp. Buffett filed his first tax return at age 13, claiming a $35 deduction for the bicycle he used to deliver newspapers, Forbes said.
Gates in November donated $695 million worth of his Microsoft stake to the Bill & Melinda Gates Foundation. Shares of Microsoft, the world’s largest software maker, of which Gates owned 9.2 percent as of November, declined 2.7 percent during the period covered by the list.
Microsoft has a market value of $262 billion, ranking it seventh among the 500 largest companies. With dividends reinvested, the shares have gained 36 percent in the last five years, trailing the 76 percent increase in the S&P 500.
Slim, Mittal, the Ambanis
In 2006, Buffett earmarked more than 12 million Berkshire shares, worth $37 billion at the time, to charity, including the Gates Foundation, according to the Chronicle of Philanthropy. Steel magnate Andrew Carnegie, one of the richest men of the 19th century, gave much of his wealth to charity.
Slim, the son of Lebanese immigrants to Mexico, amassed his fortune building Latin America’s largest telecommunication carriers, according to Forbes.
Indian steel entrepreneur Lakshmi Mittal was fourth, and one of four Indians in the top 10, the magazine said. Estranged brothers Mukesh and Anil Ambani, whose father founded the Reliance Group of companies, were fifth and sixth, and Kushal Pal Singh, who heads property developer DLF Ltd., moved up 54 spots to eighth with $30 billion.
Ikea founder Ingvar Kamprad was seventh with $31 billion, making him the list’s top European, while Russia’s richest man, Oleg Deripaska, was ninth with $28 billion. Retired German supermarket mogul Karl Albrecht was 10th with $27 billion.
Yang Huiyan, Zuckerberg
There are 1,125 billionaires on the list from 54 countries and one principality, or 179 more members than a year ago, with a total net worth of $4.4 trillion, the magazine said. The average worth of a list member is $3.9 billion, or about $250 million more than last year. The top 20 members are worth at least $20.8 billion each, an increase of $3.3 billion.
The list also demonstrated the growing wealth of younger billionaires, with 50 members younger than 40, 68 percent of whom were self-made.
The average age dropped to 61, helped by Russia, where the average of billionaires is 46, and China, where the average is 48, the magazine said. China’s richest person is 26-year-old Yang Huiyan. She is the owner of property company Country Garden Holdings Co., listed at 125 with $7.4 billion.
The youngest member on the list was Facebook founder Mark Zuckerberg, 23, at 785 with $1.5 billion, the youngest self-made billionaire ever to make a Forbes list.
The world’s richest woman, France’s Liliane Bettencourt, the daughter of the founder of the L’Oreal SA cosmetics company, was 17th, with $22 billion. The average net worth of women on the list was $3.7 billion.
To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net