Billionaires: Is Gautam Adani considering Dubai for his family office?

In our fortnightly round-up of the world's super wealthy, activist investor Carl Icahn is betting against GameStop and Warren Buffett donates $758m in Berkshire shares to charity

Gautam Adani, chairman of the Adani Group, is considering setting up a family office after his net worth surged $58bn this year. AFP
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Gautam Adani

Gautam Adani, the world's third-richest person with a net worth of $128 billion, is considering setting up a family office overseas to manage his ballooning wealth, according to sources.

The chairman of the ports-to-power Adani Group conglomerate is looking at Dubai or New York as the base for the office, which will invest the Adani family’s personal funds, the sources said.

The group’s founders are in the process of hiring a full suite of specialised family office managers, they added.

The move comes amid a $58 billion surge in Mr Adani’s personal wealth this year — the most among the world’s richest people, according to the Bloomberg Billionaires Index.

It also reflects the tycoon and his family’s increasingly global ambitions, as the Adani Group makes significant overseas acquisitions beyond its traditional stronghold in India.

If Mr Adani follows through on the plan, he’ll join a crop of the ultra-rich who have family offices to manage their wealth, personal investments and philanthropy.

Hedge fund billionaire Ray Dalio and Google co-founder Sergey Brin have set theirs up in Singapore, while Mr Adani’s compatriot and Asia’s second-richest person, Mukesh Ambani, is in the process of opening a family office in the city-state.

The Adani family is currently talking to consultants and tax experts about the plans, the sources said. The location of the office is still in flux and may change based on the advice they receive and availability of resources.

A representative for the Adani Group, who also fields media inquiries for the billionaire, said: “The information is completely baseless and we deny such a development.”

The tycoon’s elder brother, Vinod Adani, is based in Dubai and manages trading businesses there, as well as in Singapore and Jakarta.

Vinod Adani, who is the richest non-resident Indian in the world, according to the latest Hurun India Rich List, runs Adani Global Investment DMCC, a closely held firm set up in 2016 to invest in commercial enterprises and manage them, according to the company’s website.

The Adani family’s $6.5 billion deal earlier this year to buy Holcim’s two India cement makers was executed “through an offshore special purpose vehicle”, according to a media statement in May, showing the conglomerate’s growing clout in international financial dealings.

Mr Adani is a first-generation entrepreneur who started off as a diamond trader in Mumbai in the 1980s before setting up an agri-trading firm.

He later branched into coal trading and ports and, in the past few years, has been rapidly diversifying his sprawling infrastructure empire into green energy, airports, digital services, data centres, cement and media.

The Adani empire’s breakneck pace of expansion has in part fuelled blistering rallies in the shares of his listed companies, with the flagship Adani Enterprises more than doubling in value this year for the steepest surge on the Nifty 50 Index.

Those gains have fed the tycoon’s wealth, but have also sparked concerns that the Adani companies are trading at far higher valuations than global and local peers.

Billionaire activist investor Carl Icahn still holds a large position in video-game retailer GameStop. AFP

Carl Icahn

Billionaire activist investor Carl Icahn began shorting GameStop during the height of the meme-stock frenzy around January 2021 and still holds a large position in the video-game retailer, according to sources.

Mr Icahn started building the short when GameStop was trading near its peak of $483 per share and still holds a large bet against the retailer’s shares, said the sources.

The investor, who has added to his position from time to time, is betting that GameStop’s stock is not trading on its fundamentals and will continue to fall, the sources said.

The size of his position is not clear.

Representatives for Mr Icahn and GameStop declined to comment.

GameStop, now the subject of a documentary on Netflix, became a poster child for so-called meme stocks when retail trading took off during the coronavirus pandemic, aided by no-fee trading apps and fiscal stimulus.

Individual investors, egging each other on in Reddit forums, ploughed money into GameStop in a push to burn money managers who bet against the retailer.

The effort, known as a short squeeze, led to several investors who held similar shorts to feel the pinch. That included Melvin Capital, the hedge fund run by Gabe Plotkin, which said in May it was folding due to heavy losses from its bet against GameStop.

Short sellers make money by betting that a stock will fall.

This marks a rare instance of Mr Icahn betting against meme stocks. However, the investor has taken sizeable shorts elsewhere, including a bet on the downfall of malls through derivatives known as CMBX.

More than one fifth of GameStop’s shares available for trading are currently sold short, according to data compiled by S3 Partners, more than double the level seen this time last year.

Warren Buffett, chairman of Berkshire Hathaway, has donated more than $758 million worth of his company's stock to charities. AP

Warren Buffett

Warren Buffett has donated Berkshire Hathaway stock valued at more than $758 million to charities, including one named after his late wife.

Mr Buffett donated 1.5 million Class B shares to the Susan Thompson Buffett Foundation and 300,000 shares each to the Sherwood Foundation, the Howard G Buffett Foundation and the NoVo Foundation, according to a filing.

He made the donation after converting 1,600 Class A shares into 2.4 million Class B shares.

Mr Buffett, 92, is the world’s sixth-richest person with a $110.4 billion net worth, according to the Bloomberg Billionaires Index.

His fortune has gained $1.5 billion this year, even as the net worth of most of those on the ranking declined amid market turmoil. His wealth would be considerably higher were it not for his charitable donations.

In 2010, Mr Buffett started the Giving Pledge with his friends, Bill Gates and Melinda French Gates, saying he would donate 99 per cent of his fortune, either in his lifetime or at his death.

He’s already given more than $32 billion worth of Berkshire stock to the Bill & Melinda Gates Foundation and has given regularly to his family members’ foundations.

Mike Novogratz, founder and chief executive of Galaxy Digital, says the crisis of confidence in cryptocurrencies will drive people to put their money in trusted custodians. Bloomberg

Mike Novogratz

Crypto billionaire Mike Novogratz said the “crisis of confidence” in the digital asset world will drive more cryptocurrency users to seek out institutional players like Fidelity Investments.

The founder of Galaxy Digital Holdings, a crypto financial services company, told CNBC that more people will put their money in “safe and trusted custodians”.

“The big winners in this are going to be people like Fidelity who have just come out with their crypto product,” Mr Novogratz said.

Quote
We certainly have a crisis of confidence in this market. We’re not out of the woods yet
Mike Novogratz, founder of Galaxy Digital Holdings

He previously touted Fidelity’s involvement in the industry in September, when Bitcoin had lost about half its value. The largest digital currency is now down 65 per cent so far this year.

He added that he sees a buying opportunity for crypto in the long run, but it will take the industry time to rebuild trust.

Galaxy Digital previously revealed a $76.8 million exposure to FTX.com. Other crypto-related companies have made similar disclosures amid the exchange’s unravelling.

Sam Bankman-Fried’s FTX empire filed for bankruptcy on November 11. Court papers have shown that FTX-linked entities owed their 50 biggest unsecured creditors more than $3 billion.

“We certainly have a crisis of confidence in this market,” Mr Novogratz told CNBC. “We’re not out of the woods yet.”

The FTX collapse adds to a growing tally of scandals to roil the crypto industry in recent months.

Earlier this year, the TerraUSD meltdown put the focus on Mr Novogratz, who had backed Terraform Labs, the company behind Terra and Luna. In the aftermath, Mr Novogratz called it a “big idea that failed”.

Updated: November 28, 2022, 5:30 AM
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