How NZ's super-rich made their money
Friday, 3 January 2020
Whether they inherit money on a silver platter like Donald Trump or build their own business like Amazon's Jeff Bezos, the super-rich derive their wealth in lots of different ways.
In New Zealand, the rich are getting richer. There are now more than 350 New Zealanders with more than $50 million in assets, according to the Inland Revenue.
While $50m is a lot of money, it pales in comparison to the wealth amassed by some of our biggest success stories.
We take a look at some of New Zealand's billionaires and how they made their fortunes.
**READ MORE:
* Property investment, tax systems help propel super rich to greater wealth
* Property portfolio propels Sir Robert Jones to billionaire status
* Peter Thiel joins fellow Kiwis Graeme Hart and Richard Chandler on Forbes rich list
* Rich list revealed, with combined wealth of $60 billion**
Graeme Hart
New Zealand's richest man is worth more than $6.98 billion, according to Bloomberg's Billionaire index. Like most people in the super-rich bracket, Hart earned his fortune in the world of finance.
Hart owns Rank Group, a secretive private equity firm which has interests in the packaging, consumer goods, and building supplies sectors. Rank is a holding company for Hart's assets.
Hart started Rank in 2006 through the acquisition of Carter Holt Harvey. The group has since acquired companies including International Paper's beverage packaging division, and Swiss packaging giant SIG. In 2010, Hart bought food container business Pactiv for US$6.5b.
Private equity firms like Rank earn a fortune by buying companies using a large amount of debt and a small equity stake. The debt helps them to amplify their returns. Private equity firms generally cut costs, try and make companies more profitable, and sell them at a later date.
Across the world, these firms are known for working global tax laws to their advantage. Sales of companies are usually only subject to capital gains tax in most countries. They firms can also deduct interest payments against tax bills for the companies they own.
Other private equity titans have used their wealth to secure New Zealand residency. American Ric Kayne, the billionaire founder of private equity firm Kayne Anderson Capital, has NZ citizenship after spending millions on property developments and golf courses.
Richard and Christopher Chandler
The Chandlers, originally from Waikato, inherited wealth through their family's retail empire but turned that into billions through a series of successful investments in emerging markets companies.
The Chandlers made billions through their old investment company Sovereign Asset Management. Sovereign invested in Korean industrial conglomerates, Russian oil companies, and telecoms companies in Brazil, netting the brothers a fortune outside of NZ.
Sovereign was a leading 'active' fund manager, which publicised its push for companies to improve their corporate governance. The firm took stakes in emerging markets in the hope of unlocking value. The strategy worked — the brothers are said to have made more than five times their money on an investment in South Korean oil refiner SK.
In the mid-2000s, the Chandlers split their business interests, but they continue to invest. Richard Chandler took a majority stake in Tasmanian timber company Gunns in 2012, while Christopher Chandler set up Legatum Capital, which spawned Brexit-backing think tank The Legatum Institute.
Peter Cooper
Hailing from Kaitaia, Peter Cooper grew up a world away from the steel and glass towers of Los Angeles and New York. But the Kiwi has built a reputation as one of the world's top investors, with a wide-ranging portfolio of interests in America.
Cooper began building his fortune in NZ and started out as a lawyer. He spent 11 years in the legal profession, including a spell as a partner at Russell McVeagh, specialising in commercial and property law.
He left New Zealand after the stock market crash of the late 1980s, moving to the US with his young family. He has forged a career as a successful real estate mogul and private equity investor.
Cooper is also known for backing Coliseum Sports Media, the ill-fated sports streaming platform that used to own the rights to English Premier League football in New Zealand.
The billionaire's business interests now come under the Cooper & Company umbrella. The company is best known for completing Auckland's Britomart development.
In the US, Cooper has developed huge retail complexes including one in Southlake, Texas, listed as a retail, restaurant, office and hospitality destination.
Sir Robert Jones
According to the 2019 NBR Rich List, Sir Robert Jones is New Zealand's newest billionaire.
From Naenae, the controversial property tycoon has amassed a fortune through smart investments, cashing in on the NZ real estate boom and demand for commercial sites in recent years.
Jones started as a commercial property investor in 1962 aged just 22, when he bought a building in Lower Hutt. He has forged an empire across Australasia and Scotland, investing in huge commercial developments through Robert Jones Holdings (RJH).
The company's investments include the $10m Civic Assurance House on Lambton Quay, Wellington, and Auckland's AIA Building. In Scotland, Jones owns the listed 201 West George Street Building in Glasgow.
According to NBR, Jones has a net worth of about $1b. RJH has 700 commercial tenancies across 26 buildings worldwide, and claims to be one of New Zealand's biggest private companies.
Jones's net worth has grown significantly in recent years, helped by record low interest rates and inflated asset prices. The absence of a capital gains tax in New Zealand has also helped large investors consolidate their wealth.