How the 2011 rich list will look

The BRW Rich 200 list is typically a very good reflection for what is happening in the Australian economy.

For decades, when the rivers of advertising gold were still running strong, the media moguls dominated.

When the cheap credit was flooding the market in 2006 and 2007, an army of financial engineers (including billionaire Kerr Neilson and the less successful Phil Green and David Coe) emerged.

Thanks to consumers spending Kevin Rudd’s big GFC handouts in 2009, shopping centre king Frank Lowy rose to the top of last year’s rich list for the first time in 2010.

This year, the top of the rich list – like the rest of the Australian economy – will be transformed by the resources sector.

Last year was, in hindsight, a beauty for Australia’s richest 200 entrepreneurs. Total wealth rose an impressive $21 billion to $135 billion and the increases were spread evenly across retail, property, resources, financial services and technology. Every member of the top 10 on the list posted increases, according to BRW:

1. Frank Lowy – $5.04 billion (up from $4.2 billion)
2. Gina Rinehart – $4.75 billion ($3.47 billion)
3. Anthony Pratt – $4.6 billion ($4.3 billion)
4. Andrew Forrest – $4.24 billion ($2.38 billion)
5. Harry Triguboff – $4.2 billion ($3.66 billion)
6. James Packer – $4.1 billion ($3 billion)
7. Clive Palmer – $3.92 billion ($3.42 billion)
8. John Gandel – $3.03 billion ($2.70 billion)
9. Chris Wallin – $2.59 billion ($595 million)
10. Kerr Neilson – $2.33 billion ($1.6 billion)

But the past 12 months have been very different.

Australia’s two-speed economy has kept asset prices subdued.

Property prices have been stable at best and slightly lower at worst.

Most importantly, the benchmark ASX 200 index has increased 4.7% in the last year, compared with a 20% increase in the year leading up to the 2010 rich list.

In fact, only one sector has really performed strongly – the seemingly indestructible mining industry.

My estimates of the fortunes of the top 10 members of the rich list (calculated using public company information and reported transactions in the last 12 months) suggest that the top three places on the rich list will be held by miners, or those closely connected to the resources sector.

Here’s my predicted top 10 for this year’s BRW Rich 200:

1. Ivan Glasenberg – $10 billion

Who would have thought that the history-making $60 billion float of commodities trader Glencore would have such an Australian flavour? But in recent weeks it has emerged that South African-born, Swiss-based chief executive Ivan Glasenberg is actually an Australian citizen, due to a short stint here as a trader in the 1980s. His stake in Glencore is expected to be around $9.4 billion, although proceeds from selling shares into the float will take him to $10 billion. However, Glasenberg will be restricted in the number of shares he could sell in the next five years due to conditions in the float.

2. Gina Rinehart – $9 billion

Iron ore mogul Gina Rinehart looked set to grab top spot on the Rich 200 until Glasenberg’s citizenship was revealed, but she will still post one of the biggest increases on the list when her fortune jumps to around $9 billion. Surging commodity prices mean Rinehart’s iron ore businesses are generating as much as $500 million in cash a year and she is in the process of developing two coal projects with a total value of $15 billion. She could yet eclipse Glasenberg in the coming years.

3. Andrew Forrest – $6.3 million

It’s been a tough year for Andrew “Twiggy” Forrest, who lost a Federal Court case in which he was accused of misleading investors, and faces the prospect of being banned as a director of Fortescue Metals Group. Forrest has taken his fight to the High Court, but the drama hasn’t worried investors, who have pushed Fortescue shares up by more than 80% in the last 12 months.

4. Frank Lowy – $5 billion

It’s been a busy year for Australia’s shopping centre king, Frank Lowy. He’s stepped away from the day-to-day running of the Westfield empire, split Westfield’s Australian assets into a separate trust and suffered the heart-ache of overseeing Australia’s unsuccessful bid for the soccer World Cup. Through all of this, the Lowy family’s assets have remained reasonably stable.

5. Anthony Pratt – $4.8 billion

It’s getting harder and harder to monitor the Pratt family fortune. Three chunks of the business are in the control of different groups of the family – Anthony runs the US arm of Visy Industries, Alex and Heloise Waislitz run the Thorney Investments arm and Fiona and Raphael Geminder run the industrial packaging arm, called PACT Group. Shares in Visy Industries’ nearest public company proxy, Amcor, is up 8% in the last year, which provides a rough guide for the Pratt family.

6. Harry Triguboff – $4.3 billion

Sydney apartment king Harry Triguboff has had a few issues to contend with this year, including interest rate fears, persistent caution from local investors and a lack of investors from overseas. Indeed, Triguboff recently travelled to China to study why investors there have stopped buying his properties. Despite all this, Sydney unit prices have actually edged up 3.6% in the last year, so Harry’s fortune should have risen slightly.

7. James Packer – $4.2 billion

James Packer continued the concentration of his assets around media and gambling recently with the sale of the final chunk of his family’s agriculture empire – a half stake in the Teys Bros. meat processing business. During the last 12 months, Packer has increased his holdings in Crown and Consolidated Media and added Ten Network to his portfolio. While Crown shares are up over the last year, both Ten and Consolidated Media have fallen, leaving him with a relatively small gain.

8. Clive Palmer – $4 billion

Will it be fourth time lucky for Queensland coal baron Clive Palmer? After three aborted attempts to float his company Resourcehouse on the Hong Kong sharemarket, we should finally get something concrete on Palmer’s fortune when the company lists next month. Palmer’s stake appears to be worth $3.6 billion, and based on this his total fortune should be around $4 billion.

9. John Gandel – $3.3 billion

Reclusive shopping centre magnate John Gandel should enjoy a nice rise this year thanks to steady increases in the value of the Chadstone and Northland shopping centres (in which he owns a 50% stake) and shares in CFS Retail Trust.

10. Chris Wallin – $2.7 billion

Queensland coal baron Chris Wallin remains very much the mystery man and the bulk of his fortune is based on an 80% share in the Byerwen coal project in Queensland’s Bowen Basin, which was valued at $2.5 billion last year. Since then, coal prices have kept rising, pushing Wallin’s fortune moderately higher.