Adam Neumann
WeWork never figured out how to make money. Adam Neumann sure did.
The office-leasing business declared bankruptcy on November 6, two years after finally going public minus its co-founder.
It has $19 billion of liabilities and $15 billion of assets. Longtime investors, including SoftBank Group and the Vision Fund, will add to the enormous losses they’ve already taken on the venture.
“It has been challenging for me to watch from the sidelines as WeWork has failed to take advantage of a product that is more relevant today than ever before,” Mr Neumann, 44, said in a statement at the time.
But a part of Mr Neumann might be thankful he was forced out in 2019 following the company’s disastrous first attempt at an initial public offering.
While battering his reputation, the exit left him with plenty of liquidity and he’s still worth $1.7 billion, according to the Bloomberg Billionaires Index.
WeWork offices – in pictures
To be sure, WeWork’s failure hurt Mr Neumann’s wealth. When it went public in a merger with a special purpose acquisition company in 2021, Mr Neumann had a fortune of $2.3 billion, according to the index, with nearly one third in WeWork shares. They’ve since fallen more than 99 per cent.
But the deal also revealed how he managed to extract huge amounts of cash from WeWork in better times.
The former chief executive’s name was mentioned 197 times in a merger filing alongside eye-watering payouts, including a $185 million non-compete agreement, $106 million settlement payment and $578 million received for shares sold by Mr Neumann’s We Holdings to SoftBank.
These days, Mr Neumann is busy with a new start-up, Flow, which received a $350 million investment from venture capital firm Andreessen Horowitz at a $1 billion valuation in August 2022 before even beginning operations.
Flow will run multifamily residential properties that aim to foster a feeling of ownership and community.
At least some of the residential properties were already owned by Mr Neumann. Because his own investment in the company couldn’t be determined, Flow hasn’t been factored into Mr Neumann’s fortune, meaning he could be even wealthier than Bloomberg’s figure.
Not all of his investments outside of WeWork have been going so well. His family office fell behind on interest payments on a $31 million mortgage tied to a San Jose office building in California, according to an October mortgage filing.
Mr Neumann famously invested in office buildings, some of which were rented back to WeWork, one of the conflicts of interest that sunk the first IPO.
Leon Cooperman
Billionaire and former hedge fund manager Leon Cooperman has taken a late stake in Manchester United, the football club that’s nearing the end of a year-long bidding war.
Mr Cooperman reported a position of just under 1 million shares currently valued at $16.8 million, according to a recent filing.
With a net worth of $2.6 billion, according to the Bloomberg Billionaires Index, Mr Cooperman is the founder of New York-based Omega Advisors who converted his hedge fund firm into a family office in 2018.
Last month, a Qatari group led by Sheikh Jassim bin Hamad Al Thani withdrew its offer to buy Manchester United, paving the way for British billionaire Sir Jim Ratcliffe to eventually gain control of the famous football club.
Funds have been betting on the outcome of the Manchester United sale process, which was officially kicked off by the Glazer family a year ago.
At times, the bidding war was closer to a frenzied Premier League deadline day or NFL draft than a billion-dollar deal and has caused the club’s share price – listed in New York – to be highly volatile.
So far this year, the stock has fallen 19.02 per cent.
Warren Buffett
Warren Buffett’s Berkshire Hathaway reduced the number of stocks in its portfolio in the third quarter, exiting stakes in General Motors and Activision Blizzard while trimming bets on companies including Hewlett Packard.
The conglomerate’s retreat from Activision completes Mr Buffett’s arbitrage play amid the video-game maker’s prolonged effort to merge with Microsoft, which ran into antitrust scrutiny before the deal was completed in October.
Altogether, Berkshire exited stakes in seven companies, not including the restructuring of its investment in Liberty Media and related entities. The value of its disclosed investments decreased 10 per cent from the previous quarter to $312.8 billion.
The conglomerate said it had omitted some data from the filing that was reported confidentially to regulators, and it’s unclear whether the information withheld related to a new or existing position.
The Securities and Exchange Commission sometimes allows companies to withhold information from the public to limit copycat investing while a firm is building or cutting a position.
Berkshire has been a net seller of equities throughout 2023, pocketing about $23.6 billion from stock sales after purchases in the first nine months of this year.
Those equity sales have contributed to a high-class problem for the conglomerate: More money than it can easily put to work.
Much of the hoard has ended up in short-dated Treasuries, helping Berkshire rack up a record $157 billion in cash.
Stanley Druckenmiller
Billionaire Stanley Druckenmiller’s family office led investment firms for the world’s rich in trimming artificial intelligence bets in the last quarter, pocketing gains from one of this year’s hottest trends.
Mr Druckenmiller’s Duquesne Family Office cut its Nvidia stake in the quarter ended September 30, according to its 13F filing, the first time this year the New York-based firm disclosed a drop in its holdings of the major beneficiary of increased AI interest.
George Soros’s family office and a division of multifamily office Stonehage Fleming also offloaded the stock in the period. Nvidia’s shares have surged almost 240 per cent this year, making it the S&P 500 index’s top performer.
Nvidia has become the poster child for AI computing as data-centre operators stock up on the company’s processors to meet skyrocketing demand for chatbots and other tools, helping to make the California-based company the first chipmaker to be worth $1 trillion.
Mr Druckenmiller, 70, sold about 75,000 Nvidia shares in the third quarter worth as much as $37.2 million, based on its share price in the period.
Nvidia remains the biggest holding by market value in Mr Druckenmiller’s family office at $380.5 million as of September 30, with South Korea e-commerce giant Coupang and Microsoft among its other major bets.
Soros Fund Management, meanwhile, exited Nvidia in the third quarter, selling stock worth as much as $4.9 million.
Mr Druckenmiller and Mr Soros, 93, have net worths of $9.9 billion and $7.2 billion, respectively, according to the Bloomberg Billionaires Index.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
UAE currency: the story behind the money in your pockets
Profile of RentSher
Started: October 2015 in India, November 2016 in UAE
Founders: Harsh Dhand; Vaibhav and Purvashi Doshi
Based: Bangalore, India and Dubai, UAE
Sector: Online rental marketplace
Size: 40 employees
Investment: $2 million
New process leads to panic among jobseekers
As a UAE-based travel agent who processes tourist visas from the Philippines, Jennifer Pacia Gado is fielding a lot of calls from concerned travellers just now. And they are all asking the same question.
“My clients are mostly Filipinos, and they [all want to know] about good conduct certificates,” says the 34-year-old Filipina, who has lived in the UAE for five years.
Ms Gado contacted the Philippines Embassy to get more information on the certificate so she can share it with her clients. She says many are worried about the process and associated costs – which could be as high as Dh500 to obtain and attest a good conduct certificate from the Philippines for jobseekers already living in the UAE.
“They are worried about this because when they arrive here without the NBI [National Bureau of Investigation] clearance, it is a hassle because it takes time,” she says.
“They need to go first to the embassy to apply for the application of the NBI clearance. After that they have go to the police station [in the UAE] for the fingerprints. And then they will apply for the special power of attorney so that someone can finish the process in the Philippines. So it is a long process and more expensive if you are doing it from here.”
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500 People from Gaza enter France
115 Special programme for artists
25 Evacuation of injured and sick
U19 World Cup in South Africa
Group A: India, Japan, New Zealand, Sri Lanka
Group B: Australia, England, Nigeria, West Indies
Group C: Bangladesh, Pakistan, Scotland, Zimbabwe
Group D: Afghanistan, Canada, South Africa, UAE
UAE fixtures
Saturday, January 18, v Canada
Wednesday, January 22, v Afghanistan
Saturday, January 25, v South Africa
UAE squad
Aryan Lakra (captain), Vriitya Aravind, Deshan Chethyia, Mohammed Farazuddin, Jonathan Figy, Osama Hassan, Karthik Meiyappan, Rishabh Mukherjee, Ali Naseer, Wasi Shah, Alishan Sharafu, Sanchit Sharma, Kai Smith, Akasha Tahir, Ansh Tandon
Terror attacks in Paris, November 13, 2015
- At 9.16pm, three suicide attackers killed one person outside the Atade de France during a foootball match between France and Germany
- At 9.25pm, three attackers opened fire on restaurants and cafes over 20 minutes, killing 39 people
- Shortly after 9.40pm, three other attackers launched a three-hour raid on the Bataclan, in which 1,500 people had gathered to watch a rock concert. In total, 90 people were killed
- Salah Abdeslam, the only survivor of the terrorists, did not directly participate in the attacks, thought to be due to a technical glitch in his suicide vest
- He fled to Belgium and was involved in attacks on Brussels in March 2016. He is serving a life sentence in France
SANCTIONED
- Kirill Shamalov, Russia's youngest billionaire and previously married to Putin's daughter Katarina
- Petr Fradkov, head of recently sanctioned Promsvyazbank and son of former head of Russian Foreign Intelligence, the FSB.
- Denis Bortnikov, Deputy President of Russia's largest bank VTB. He is the son of Alexander Bortnikov, head of the FSB which was responsible for the poisoning of political activist Alexey Navalny in August 2020 with banned chemical agent novichok.
- Yury Slyusar, director of United Aircraft Corporation, a major aircraft manufacturer for the Russian military.
- Elena Aleksandrovna Georgieva, chair of the board of Novikombank, a state-owned defence conglomerate.
