Forbes List Has 55 Fewer Russian Billionaires

The majority of Russia's billionaires couldn't cope with the financial crisis, which wiped 55 names from the country's tally in the 2009 Forbes rich list. Of the 32 who managed to defend their spots on the list, all lost money — as did 87 percent of the world's tycoons.

The collective pocketbook of the world's billionaires ended the troubled year an astronomical $2 trillion lighter, falling to $2.4 trillion. The new list contains 793 billionaires — 332 fewer than in 2008 — putting the Russian casualties at almost 17 percent of the global total.

The competition for first place turned into a race for survival: Microsoft founder Bill Gates recaptured the title, with losses of "just" $18 billion for a net worth of $40 billion. Gates looks unscathed compared to Warren Buffett, whose fortune shed $25 billion to take second place at $37 billion, following the worst year ever for his Berkshire Hathaway.

Despite everything, 44 people managed not only to hang on to their wealth but to increase it. One of the best bets was on consumers looking to save money: Nine of the world's 20 richest people own discount stores.

Forbes compiles the rating every year by taking into account stakes in companies (using share prices for publicly traded companies and comparisons with similar businesses for closely held firms), private investments, real estate and art collections. Reporters also speak with the businessmen, their representatives and market participants.

The list was shorter for the first time since 2003, when the number of tycoons fell to 476 with a combined worth of $1.4 trillion. Then began a boom, led by developing markets and surging demand for raw materials, credit and property.

In 2005, Russians took third place, after the United States and Germany, with 27 people, up from just seven in 2002; by early March 2008, Forbes listed 87 Russian billionaires, and its Russian edition had 110 just a month and a half later as the country's stock market soared.

But in the period from Feb. 11 last year and this year, when the data were gathered, the RTS Index fell 67.64 percent, leaving 32 Russian citizens, including exiles Boris Berezovsky and Mikhail Gutseriyev, on the list.
Their combined wealth fell $471.4 billion to $102.1 billion, which also deprived Moscow of its title as the world's billionaire capital. In 2008, Moscow had 74 — slightly more than New York's 71 and more than double London's 36. Now, both have passed Moscow's 27, with New York home to 55 and London with 28.

Hardest hit was Oleg Deripaska, who in 2008 took ninth place with $28 billion — an increase of $14.7 billion — to surpass Roman Abramovich as the wealthiest Russian. The new Forbes list has him in 164th place at $3.5 billion, a drop of 88 percent.

"That's the value of the assets of Deripaska's companies, minus debt," said Maxim Kashulinsky, editor of the Russian edition of Forbes.

When the crisis hit, Deripaska's companies were among the most leveraged, and now they're fighting for survival. United Company RusAl has debts of $14 billion to banks, while his GAZ Group owes about 45 billion rubles ($1.3 billion). Acquaintances of Deripaska say his holding, Basic Element, has overall debts of $25 billion to $28 billion.

Leading the Russian table now is Mikhail Prokhorov, who went into the crisis not with debt but dollars.

He sold Vladimir Potanin a 50 percent stake in their holding KM-Invest, which controlled the majority of the former partners' assets, as well as 25 percent of Norilsk Nickel to RusAl. The two deals brought him around $8.5 billion to $9 billion, people who know Prokhorov said, and RusAl owes him another $2.8 billion.  

Prokhorov has already managed to spend some of his money: He has invested in Renaissance Capital, TGK-4 and his Snob media project, among others. Forbes took into account the cash and the investments Prokhorov made, Kashulinsky said. His fortune also fell — to $9.5 billion from $19.5 billion.
Abramovich has hung on to his silver medal.

"Eight and a half billion dollars looks about right, if you're talking about his main assets and the cash he had after selling Sibneft and buying [into] Evraz. How much he has in his bank accounts now, however, no one can really say from outside," said a source close to Abramovich.

He said the estimation of Abramovich's losses appeared to be based exclusively on Evraz's plummeting share price.

"Despite rumors, Roman had hardly any of his money in the stock market — he's fairly conservative in that regard," the source said.

A source close to the shareholders of Alfa Group said he thought that the fortunes of Mikhail Fridman, German Khan and Alexei Kuzmichyov were somewhat higher than Forbes' figures.

All nine of Russia's property developers on the 2008 list missed the cut this year. The wealthiest had been PIK Group owners Yury Zhukov and Kirill Pisarev (with $6.1 billion each), while the Mirax Group's Sergei Polonsky and Crocus Group's Aras Alagarov each had $1.2 billion.

Then, the developers' fortunes were based on the high capitalization of the public companies, which boosted the valuations of the privately held builders, Kashulinsky said.

London-traded shares of PIK are worth about 98 percent less than they were a year ago.

Yelena Baturina, the wife of Mayor Yury Luzhkov and owner of Inteko, also fell from the list, depriving it of its only Russian woman.