Billionaires: Brazil withdraws $3.3m from Elon Musk companies’ accounts

In our round-up of the world’s ultra-wealthy, Steve Cohen’s hedge fund plans to return billions to investors and Warren Buffett's Berkshire offloads Bank of America shares worth $228.7m in latest sale

Elon Musk, chief executive of SpaceX and Tesla, is mired in a bitter stand-off with Brazil’s top judge. Reuters

Brazil withdrew 18.35 million reais ($3.3 million) from the bank accounts of Elon Musk’s X and Starlink to pay for fines imposed by the Supreme Court, continuing a dispute that has led to the blackout of the billionaire’s social media service in the country.

The court ordered the transfer of funds on September 11 and the accounts have since been unfrozen, according to a statement from the judicial body released on Friday.

Mr Musk is mired in a bitter standoff with Brazil’s top judge, who is leading a campaign against fake news and hate speech in Latin America’s largest nation.

The chief executive of Tesla is the world's richest person with a personal net worth estimated at $251 billion, according to the Bloomberg Billionaires Index.

Justice Alexandre de Moraes ordered the platform formerly known as Twitter be banned last month and blocked Starlink’s accounts in a bid to force the US billionaire’s company to pay the penalties imposed for ignoring a previous order.

“The blocking of the accounts occurred because the justice considered the joint liability between X Brasil Internet, Starlink Brazil Holding and Starlink Brazil Internet Services for payment of fines,” the court said.

X remains banned in Brazil as it has yet to comply with orders from Mr Moraes to block certain user accounts and to appoint a legal representative in the country.

“Elon Musk showed his total disrespect for Brazilian sovereignty and, in particular, for the judiciary, setting himself up as a true supranational entity and immune to the laws of each country,” Mr de Moraes wrote.

Billionaire Steve Cohen’s Point72 Asset Management is preparing to return some capital to investors for the first time. Bloomberg

Steve Cohen

Billionaire Steve Cohen’s Point72 Asset Management is preparing to return some capital to investors for the first time, joining multi-strategy hedge fund peers looking for ways to restrict their assets after a period of explosive growth.

The company is considering handing profits to clients after the end of the year, according to sources. The amount could run into billions of dollars, they added. They could not say with certainty how much would be returned as the details are yet to be firmed up, and said the plans could still change.

Hedge fund managers typically resort to restricting new money and even return capital to avoid becoming too big, because size can be a hurdle when navigating volatile markets and certain asset classes.

Point72 has raised almost $12.8 billion since 2020 and manages a record $35.2 billion currently. The hedge fund gained about 10 per cent through August this year, or more than $3 billion, Bloomberg News reported previously.

The move is part of an increasing trend in the $4 trillion industry, where the biggest funds with a record of generating steady returns such as Point72, Millennium Management and Citadel get flooded with more cash than they can manage, while a vast majority of smaller firms struggle to raise capital.

Citadel has given back $25 billion to clients since 2017. Millennium has returned about $38 billion since 2020, although much of it came back to the company in a new share class.

Investors pulled a net $216 billion between 2022 and 2023 and withdrew another $39 billion this year through May, according to eVestment.

The exodus has contributed to more than 1,000 hedge funds closing since the start of 2022, discouraging start-ups.

Veteran investor Warren Buffett started investing in Bank of America in 2011. EPA

Warren Buffett

Warren Buffett's Berkshire Hathaway has sold shares worth $228.7 million in Bank of America as the conglomerate continues to trim its stake in the second-largest US lender.

Berkshire, on September 10, disclosed it had sold about 5.8 million Bank of America shares between September 6 and 10.

That takes the total sale of shares to about 174.7 million since mid-July, raking in $7.19 billion, according to LSEG data.

Berkshire, still the bank's largest shareholder, has to keep reporting sales regularly until its holding falls below 10 per cent. It is currently at 11.1 per cent.

The 94-year-old billionaire, one of the world's most revered investors, started investing in Bank of America in 2011 when Berkshire bought $5 billion of preferred stock.

The stake sales come more than a year after Mr Buffett praised the bank and chief executive Brian Moynihan.

Mr Moynihan said that Mr Buffett has been a “great” investor for the bank, but he did not ask the legendary investor about the recent stake sales.

“I don't know what exactly he is doing because frankly we can't ask,” Mr Moynihan told investors at a financial conference in New York.

A Deutsche Bank analyst said last week that Berkshire could be aiming to get just below the 10 per cent reporting threshold to avoid regulatory scrutiny.

The lender's stock has lagged behind the broader markets since Berkshire kicked off its selling spree.

Johann Rupert, founder and chairman of Richemont, said global demand for watches 'has gone past the boom'. Bloomberg

Johann Rupert

The head of Richemont, the owner of Cartier and Vacheron Constantin, said the luxury watch industry must reduce production after a downturn in demand for costly timepieces.

Chairman and founder Johann Rupert told shareholders at the Swiss luxury conglomerate’s annual general meeting that global demand for watches “has gone past the boom”, held back by subdued sales in mainland China and Hong Kong.

“One should be cautious in just trying to pursue volume,” the South African billionaire said in Geneva on September 11.

The Richemont chairman, whose brands also include IWC, Jaeger-LeCoultre and Van Cleef & Arpels, applauded private competitors in the watch industry for showing restraint.

The biggest closely-held watch makers in Switzerland include Rolex, Patek Philippe and Audemars Piguet Holding.

“We have a close relationship with the private competitors and we know what they are doing and they are acting very responsibly by constraining production,” Mr Rupert said.

Although he controls Richemont through a family trust that has a majority of the voting shares, the stock is publicly traded and the company is required to provide detailed financial updates.

By contrast, closely-held watch makers in Switzerland “don’t have shareholders to report to”, he added.

After three years of gains at record value levels, Swiss watch exports have declined this year. Consumers became cautious as pandemic-era savings ran dry following a period of high inflation and as a strong Swiss franc raised watch prices and crimped profits for producers.

Compiled from Bloomberg and Reuters