Australian's richest person, Gina Rinehart, amassed a fortune thanks in large part to China's enormous demand for iron ore. Her wealth is tied up in the unlisted Hancock Prospecting, of which Ms Rinehart is the single largest shareholder.
As Hancock Prospecting is unlisted, few investors have the opportunity to invest alongside Gina Rinehart in the business responsible for her wealth. Likewise 14 of the other 23 Australians listed as billionaires (in US dollars) according to Forbes magazine have their wealth tied up in unlisted ventures which most investors don't have access to.
However there are nine billionaires who run publicly listed companies and also have the majority of their wealth tied up in those companies. Given the importance quality management can make to long-term shareholder returns, investing alongside founders who have proven their ability to create significant wealth – over a billion dollars for themselves – can be a good place to search for investment opportunities.
Here are the nine companies listed on the ASX run by billionaires who in most cases have founded the company and in all cases have a substantial percentage of their wealth tied up in their respective firms.
- Mr Len Ainsworth is the founder and Chairman of Ainsworth Game Technology (ASX: AGI), which makes gaming machines. This is Mr Ainsworth's second venture after previously founding competitor Aristocrat Leisure.
- Crown Resorts (ASX: CWN) is an owner and operator of casinos headed by one of Australia's most famous billionaires, Mr James Packer.
- Fortescue Metals Group (ASX: FMG) has quickly become a major player in the seaborne iron ore market and is headed by founder Mr Andrew Forrest.
- Global fund manager Platinum Asset Management (ASX: PTM ) has not only increased the wealth of many who invest in the Platinum funds but has also helped founder Mr Kerr Neilson increase his wealth into billionaire status as well.
- Mr Leslie Wilson is less well known compared to some billionaires who have 'celebrity status' however as Chairman of plumbing group Reece (ASX: REH), he has amassed a fortune.
- Hospital owner and operator Ramsay Health Care (ASX: RHC) is chaired by its founder Mr Paul Ramsay.
- Premier Investments owns a number of retail stores including Smiggle and Just Jeans. Premier is chaired by founder Mr Solomon Lew.
- Seven Group (ASX: SVW) is a heavy equipment dealer and investment company headed by founder Mr Kerry Stokes.
- Westfield Group (ASX: WDC) is a global property firm best known for its large destination malls and is led by founder Mr Frank Lowy.
Foolish takeaway
While certainly there is no guarantee that investing in a company run by a billionaire will lead to an investor making money, given it often takes a lifetime to amass a billion dollar fortune there is a reasonable likelihood that the underlying business has stood the test of time and compounded its earnings at an above-average rate. These are desirable characteristics to identify for any investment, and makes these companies worth keeping on your watch list.
