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Dangote, Others Raked in $237Bn in 2016

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In a year when populist voters reshaped power and politics across Europe and the U.S., the world’s wealthiest people are ending 2016 with $237 billion more than they had at the start.

Triggered by disappointing economic data from China at the beginning, the U.K.’s vote to leave the European Union in the middle and the election of billionaire Donald Trump at the end, the biggest fortunes on the planet whipsawed through $4.8 trillion of daily net worth gains and losses during the year, rising 5.7 percent to $4.4 trillion by the close of trading Dec. 27, according to the Bloomberg Billionaires Index.

“In general, clients rode through the volatility,” said Simon Smiles, chief investment officer for ultra-high-net-worth clients at UBS Wealth Management. “2016 ended up being a spectacular year for risk assets. Pretty remarkable given the start of the year.”

The gains were led by Warren Buffett, who added $11.8 billion during the year as his investment firm Berkshire Hathaway Inc. saw its airline and banking holdings soar after Trump’s surprise victory on Nov. 8. Buffett, who’s pledged to give away most of his fortune to charity, donated Berkshire Hathaway stock valued at $2.6 billion in July.

The U.S. investor reclaimed his spot as the world’s second-richest person two days after Trump’s victory ignited a year-end rally that pushed Buffett’s wealth up 19 percent for the year to $74.1 billion.

“2016’s been event-driven with global news driving prices rather than fundamentals,” said Michael Cole, president of Ascent Private Capital Management, which has about $10 billion of assets under administration.

“The belief that Trump is going to come in and deregulate big parts of the economy is driving the markets right now.”

The individual gains for the year were dominated by Americans, who had four of the five biggest increases on the index, including Microsoft Corp. co-founder Bill Gates, the world’s richest person with $91.5 billion, and oilman Harold Hamm.

The country’s richest were largely opposed to a Trump presidency during the election, including Dallas Mavericks owner Mark Cuban, who told the media in May that stocks could fall as much as 20 percent if Trump were to win the election.

U.S. billionaires — including Buffett — favoured Trump’s rival Hillary Clinton. Still, they profited from his victory when they added $77 billion to their fortunes in the post-election rally fuelled by expectations that regulations would ease and American industry would benefit.

The New York real estate mogul is building a cabinet heavy on wealth and corporate connections, and light on government experience, a mix that hedge fund billionaire Ray Dalio said last week would unleash the “animal spirits” of capitalism and drive markets even higher.

Dalio is the world’s 63rd-richest person with $14.1 billion.

Investors and executives welcomed Trump’s picks, including billionaire Wilbur Ross to lead the Department of Commerce and former Goldman Sachs Group Inc. executive Steven Mnuchin as his Treasury secretary, who have a combined net worth of at least $5.6 billion, according to the index.

“You know, I was not opposing Trump as much as most people,” Saudi Arabian billionaire Mohamed Bin Issa Al Jaber said in a Dec. 11 interview. “He’s capable and — as a businessman — he’s shrewd about the bottom line. The people he’s surrounding himself with have baggage but they’re also successful and shrewd.”

France’s Bernard Arnault was the sole non-American representative among the five best performers, adding $7.1 billion to take his fortune to $38.9 billion. His LVMH Moet Hennessy Louis Vuitton SE said the Chinese luxury-goods market is improving.

Gates remained the world’s richest person throughout the year. Amancio Ortega, Europe’s richest person and founder of the Zara clothing chain, was in second place on the index for most of the year until he ceded it to Buffett in November. Ortega, who dropped $1.7 billion in 2016, is the world’s third-richest person with $71.2 billion.

Wildcatter Hamm’s fortune was propelled by a strengthening oil price and expectations a Trump administration will slash fossil-fuel regulations. Hamm added $8.4 billion to more than double his fortune to $15.3 billion. He led the 49 energy, metals and mining billionaires, who were the best-performing category on the ranking, adding $80 billion and reversing the $32 billion fall they had in 2015.

Billionaire brothers Charles and David Koch each dropped $2 billion after Koch Industries reported on its website that annual revenue is estimated to be “as high as $100 billion,” compared with the estimate of “as much as $115 billion” that the conglomerate published on the site previously. Company spokesman Rob Carlton stated in a Nov. 17 e-mail that Koch revenue fluctuates with the price of commodities.

Technology fortunes were the second-best performing on the ranking, with 55 billionaires adding $50 billion to their fortunes over the year, despite worries that a Trump presidency might introduce policies that could hurt their companies.

“I think we’ll have to see what the policies of the administration are,” Google co-founder Sergey Brin told the media gathered on the red carpet of the annual Breakthrough Prize gala in Silicon Valley in December. “I certainly hope they will be pro-science, pro-technology and all the things this world has really benefited from.”

Amazon.com Inc. founder Jeff Bezos, who doubled his fortune to $60 billion in 2015, led gains among technology executives again this year, rising $7.5 billion in 2016 on robust sales growth at the online retailer. He was followed by Facebook Inc. co-founder Mark Zuckerberg, who added $5.4 billion.

Some of the industry’s biggest relative gains went to the founders of the world’s leading startups, such as Uber Technologies Inc.’s Travis Kalanick and Snap Inc.’s Evan Spiegel. The so-called “unicorn” billionaires, which include Spotify Inc. co-founder Martin Lorentzon, who was identified as a billionaire for the first time in 2016, secured a series of mammoth funding rounds while moving closer to testing their fortunes on the public markets.

Other billionaires uncovered by the Bloomberg index in 2016 included the father and son behind Jose Cuervo tequila, New York real estate developer Axel Stawski and Kosovo construction tycoon Behgjet Pacolli.

The index also unveiled 11 surviving family members of reclusive Thai entrepreneur Chaleo Yoovidhya, the inventor of Red Bull, whose heirs share a combined $22 billion net worth, the world’s largest energy-drink fortune. Three billionaires emerged in Argentina, including the country’s first technology billionaire Marcos Galperin, as markets rose on enthusiasm for President Mauricio Macri’s finance-friendly economic policies.

Most fortunes outside of the U.S. didn’t get the same boost from Trump’s victory, and were hurt by fluctuating commodities prices and the rise of the dollar, the currency used for the Bloomberg ranking. Nine of the 10 biggest decliners in 2016 were from outside the U.S., led by China’s second-richest person, Wang Jianlin, who lost $5.8 billion. Wang ended the year as the world’s 21st-richest person with $30.6 billion.

Nigeria’s Aliko Dangote, the richest person in Africa, lost $4.9 billion or one-third of his wealth as the combined effect of falling oil prices and the June devaluation of the naira pushed him to No. 112 with $10.4 billion. Dangote was the world’s 46th-richest person in June.

Saudi Arabia’s Prince Alwaleed Bin Talal Al Saud fell $4.9 billion, a 20 percent drop. Alwaleed said in November that all of his stakes in public companies including Citigroup Inc. are potentially for sale, reversing a longstanding policy that some of his most prized shareholdings were “forever.”

Wealth creation in China turned negative for the first time since the inception of the Bloomberg index five years ago, with the country’s richest losing $11 billion in 2016 amid a slump in the Shanghai Shenzhen CSI 300 index and a 7 percent decline for the yuan against the dollar.

Alibaba Group Holding Ltd. founder Jack Ma closed the year with $33.3 billion, adding $3.6 billion in 2016. He dropped in and out of his place as Asia’s richest person for the first four months of the year before claiming it for good in May after Alibaba’s finance affiliate, which is laying the groundwork for an initial public offering expected as soon as next year, completed a record $4.5 billion equity fundraising round.

China has 31 billionaires on the index with $262 billion, trailing the U.S., which has 179 billionaires who control $1.9 trillion, and Germany, whose 39 individuals have $281 billion. Russian billionaires also began to put the negative effects of U.S. and European sanctions behind them, reversing the combined $63 billion declines for 2014 and 2015 and adding $49 billion in 2016.

Wealth managers for the world’s richest are girding themselves for similarly frenetic start to 2017 as the seismic changes voters demanded this year start to take shape.

“Expect the unexpected,” said Sabine Kaiser, founder of SKadvisory, which advises family offices on venture capital and private equity. “I don’t think family offices are overly concerned or getting too nervous but after Brexit and Trump they’ve resigned themselves to market volatility.”


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Detained Binance executive drags EFCC, NSA to court

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Binance executive Tigran Gambaryan has has dragged the National Security Adviser Nuhu Ribadu and the Economic Financial Crimes Commission (EFCC), to court alleging violations of his fundamental rights.

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In a filing dated March 18 and presented by his lawyer Olujoke Aliyu from Aluko and Oyebode Law Firm, Gambaryan sought redress before Justice Inyang Ekwo, requesting five reliefs. Similarly, Nadeem Anjarwalla, Binance’s Africa regional manager who escaped custody on March 22, initiated a separate suit before Justice Ekwo.

Gambaryan and Anjarwalla, in the suits marked: FHC/ABJ/CS/356/24 and FHC/ABJ/CS/355/24, had sued the Office of NSA (ONSA) and EFCC as 1st and 2nd respondents.

Gambaryan, a US citizen overseeing financial crime compliance at the crypto exchange platform, alleged that his detention and the confiscation of his international travel passport violated Section 35 (1) and (4) of the 1999 Constitution, constituting a breach of his fundamental right to personal liberty. He further requested the court to order his immediate release and the return of his passport. Additionally, he sought an injunction preventing further detention related to any Binance investigations and demanded a public apology from the respondents, along with costs incurred.

Gambaryan stated that he visited Nigeria on February 26 alongside Nadeem Anjarwalla, representing Binance, in response to invitations from ONSA and EFCC. Despite attending the meeting as requested, both were detained afterward without formal charges.

During the court proceedings, T.J. Krukrubo, SAN, representing Anjarwalla and Gambaryan, informed the court of the respondents’ absence despite being served. Krukrubo also mentioned their notice of withdrawal of legal representation for Anjarwalla, filed on March 26.

Justice Ekwo noted the withdrawal of legal representation and adjourned the matter to April 8 to allow the applicants to seek new representation and give the respondents an opportunity to appear.

In Gambaryan’s case, Krukrubo stated that although the processes were served on ONSA and EFCC, they still had time to respond. He requested an adjournment, indicating that the respondents’ deadline to file their applications would expire the following week.

Consequently, Justice Ekwo scheduled the next hearing for April 8 to continue proceedings.


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AXA Mansard Empowers Female SMEs with Financial, Digital Skills

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AXA Mansard, a member of AXA has empowered 200 female Small and Medium Enterprises with financial literacy and digital business skills.

In collaboration with SME 100 Africa, the two-day training, which was held in Lagos, is part of AXA’s lined-up programmes to commemorate this year’s International Women’s Day.

Speaking, Olusesan Ogunyooye, Head of Marketing AXA Mansard, said the training was aimed to empower female SME owners with skills to improve business output and position them for the increasing economic opportunities available in an increasingly digital marketplace.

Ogunyooye noted that the move was in line with AXA Mansard’s sustainability agenda, explaining that the company was convinced that support for women through its inclusive protection programmes was pivotal to its purpose of acting for human progress by protecting what matters and its mission of moving from being a payer to a partner.

He further said that focusing on digital skills was important because the company realised the importance of digital skills to the growth of the SME sector in Nigeria and wants to ensure that women were empowered enough to be a consequential part of that growth.

“It’s almost trite to say that SMEs are the engine for economic growth, especially in developing countries like Nigeria, where over 45 million adults are business owners. What needs to be continually discussed is how Nigeria is going to unlock that potential for economic development and how much of that potential will be unlocked by women and for women.”

“For us at AXA Mansard, we are aware that digital will play a major role in unlocking these current opportunities and Nigeria’s economic future. So, to ensure that women are equally represented in unlocking these future potentials, that’s why we have collaborated with SME 100 Africa to support them in developing the required skills”.

“Our choice of digital and financial literacy skills is deliberate. We understand the power of the duo. We understand that helping these SMEs with the skills to attract more customers will be a faster means to empower them.

“We see that they have amazing products and services, but they need to understand how to attract value for themselves by attracting the right customers, and you will agree with me that virtually all customer segments are online in one way or another today.

“So, if we can empower them with digital business skills, we would have helped them with the heavy lifting of trying to find and attract customers”. Ogunyooye explained.

According to him, AXA Mansard believes that for the world to experience progress truly, there must be an equitable distribution of creation and access to opportunities for men and women. This quest for balance informed the SHE for Shield initiative, a women-centred inclusive protection programme of AXA Mansard.

SHE for Shield is a group of initiatives designed for the Nigerian woman. The goal is to see them grow, add value, and help them mitigate risks at every step.

According to the company, research has found that access to health care is one of the most important things to Nigerian women, regardless of their economic segment. They desire to be financially independent, secure, and respected in the community.

 


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IFC Invests in New 4DX Ventures Fund to Support Tech Startups in Africa

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IFC is investing $10.5 million in a new fund by 4DX Ventures, a New York-based venture capital firm focused on supporting early-stage African technology companies across a broad set of sectors, including fintech, e-commerce, edtech, climate tech, and health tech.

IFC’s investment in 4DX Ventures Fund III will come from IFC’s $225 million venture capital platform, which was launched last year to strengthen emerging VC ecosystems and invest in early-stage companies in Africa, the Middle East, Central Asia, and Pakistan.

Africa is among the regions least served by venture capital, receiving just 2% of global venture deal volume in the third quarter of 2023. Access to capital on the continent has been further exacerbated by a slowdown in global venture capital investment.

Tech ecosystems are nascent, or even nonexistent, outside of more established markets such as Egypt, Kenya, Nigeria, Senegal, and South Africa.

“IFC and 4DX Ventures share the commitment to supporting tech entrepreneurs with innovations that will help Africa leapfrog in critical areas such as climate, health care, fintech, e-commerce, and education,” said Walter Baddoo, Co-Founder and General Partner of 4DX Ventures.

“We look forward to partnering with IFC to help promising tech startups build transformative businesses and realize sustainable development impact on the continent.”

4DX’s new fund will invest in companies with tech solutions that can improve productivity, efficiency and competitiveness across Africa. The firm’s first two funds invested in companies such as Egypt-based e-commerce platform MaxAB, an IFC portfolio company; Ghana-based health tech firm mPharma; and Kenya-based B2B e-commerce platform Wasoko, formerly known as Sokowatch.

“By supporting the development of tech ecosystems in emerging markets, IFC’s venture capital platform aims to improve access to key services, boost business competitiveness, and promote job creation through digital transformation,” said Mohamed Gouled, Vice President of Industries at IFC.

“Our investment in venture funds such as 4DX Ventures will help African entrepreneurs access more financing and resources they need to scale tech innovations and bolster sustainable growth across the continent.

In addition to providing capital, IFC will work with 4DX Ventures to implement their environmental and social management system.


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