World’s richest add $92bn to their wealth in 2014

The richest people on Earth got richer in 2014, adding $92 billion to their collective fortune in the face of falling energy prices and geopolitical turmoil incited by Russian President Vladimir Putin.

The net worth of the world's 400 wealthiest billionaires on December 29th stood at $4.1 trillion, according to the Bloomberg Billionaires Index, a daily ranking of the world's richest.

The biggest gainer was Jack Ma, the co-founder of Alibaba Group Holding Ltd., China's largest e-commerce company. Ma, a former English teacher who started the Hangzhou-based company in his apartment in 1999, added $25.1 billion to his fortune, riding a 56 per cent surge in the company's shares since its September initial public offering. Ma, 50, with a $28.7 billion fortune, briefly passed Li Ka-shing as Asia's richest person.

“I am nothing but happy when young people from China do well,” Li, 86, said through his spokeswoman in Hong Kong.

Global stocks rose in 2014, with the MSCI World Index advancing 4.3 percent during the year to close at 1,731.71 on Dec. 29. The Standard and Poor’s 500 Index rose 13 percent to close at 2,090.57. The Stoxx Europe 600 gained 4.9 percent to close at 344.27.

Two of the year's other biggest gainers were Warren Buffett and Mark Zuckerberg of the US. Buffett, the chairman of Berkshire Hathaway Inc., added $13.7 billion to his net worth after the Omaha, Nebraska-based company soared 28 percent as the dozens of operating businesses the 84-year-old chairman bought over the past five decades churned out record profit.

Gates, Slim

Buffett passed Mexican telecommunications billionaire Carlos Slim on Dec. 5 to become the world's second-richest person. Bill Gates, the co-founder of Microsoft Corp., was up $9.1 billion during the year. The 59-year-old remains the world's richest person with a $87.6 billion fortune. Zuckerberg, the hoodie-wearing chief executive officer of the world's largest social-networking company, gained $10.6 billion as the Menlo Park, California-based business rose to a record on Dec. 22. This year Facebook made headway in mobile, a business that has flourished as mobile advertising increased and marketing initiatives expanded with applications and video. Facebook's acquisition of Instagram in 2012 for $1 billion has also been paying off: A Citigroup Inc. analyst said on Dec. 19 the photo- sharing app is worth $35 billion.

Russia woes

Zuckerberg's company faced a challenge in Russia, where the blocking of a Facebook page promoting a Russian opposition rally highlighted the challenges the social network faces as Putin cracks down on the Internet amid a looming economic downturn. The European Union and U.S. limited Russian companies' access to financing to punish Putin after he annexed Crimea in March. Russia's troubles have been worsened by the corresponding plunge in the price of oil, a bedrock of the country's economy. Nobody was hit harder than Vladimir Evtushenkov. Once Russia's 14th-richest person, the 66-year-old lost 80 per cent of his wealth, dropping him from the Bloomberg ranking. He was sentenced to house arrest by a Moscow court in September after a money-laundering investigation connected to the $2.5 billion purchase of shares in oil producer OAO Bashneft. The court also ruled in favor of nationalizing his stake in Bashneft, which he controlled through publicly traded AFK Sistema. Evtushenkov's fortune has fallen $8.1 billion, the most of any Russian in 2014. Leonid Mikhelson has been the biggest loser in dollar terms among those remaining in the country's 20 richest, dropping $7.8 billion since the start of the year. The 59-year-old is the chief executive officer of OAO Novatek, Russia's second-largest natural gas producer, which fell 44 percent during the year. He has a $10.1 billion fortune, according to the Bloomberg ranking.

Western sanctions

Viktor Vekselberg surpassed Alisher Usmanov as Russia's richest person after Usmanov's MegaFon OAO lost almost half its value since June. Vekselberg is worth $14.1 billion, while Usmanov fell 32 per cent to $13.8 billion. One of only a few Russians among the world's 400 richest who gained in 2014 was aluminum billionaire Oleg Deripaska, who added $1.6 billion as his Hong Kong-based United Co. Rusal rose 122 per cent. Deripaska has increased his fortune to $8.2 billion. He's the world's 154th-richest person.

"The reputation of Russian business in the west has become worse, and will continue to get worse," said Stanislav Belkovsky, a Kremlin adviser during Putin's first term who now consults for Moscow's Institute for National Strategy, a research firm. "That means that the capabilities for Russia's billionaires to run businesses abroad are going to decrease."

Adelson falls

Belkovsky says Putin will try to compensate the country’s sanctioned businessmen by giving them access to different state resources. “The competition for resources will increase, as will the redistribution of ownership,” he said. Russian billionaires weren’t the only ones to suffer losses. Sheldon Adelson, the gambling mogul who controls Las Vegas Sands Corp., the world’s largest casino company, fell $8.7 billion as the Las Vegas-based company dropped 25 percent. Macau’s casinos are looking at their first down year in revenue since the market was opened to foreign operators in 2002, after China’s President Xi Jinping cracked down on corruption on the mainland and high-rollers shunned the gambling enclave. More than half of the company’s 2013 $13.8 billion in revenue comes from Macau.

Bezos, Musk

Adelson's decline was followed by Jeffrey Bezos, the chairman of Amazon. com . The 50-year-old had $7.2 billion trimmed from his fortune as the Seattle-based company lost ground in the cloud computing market to crosstown competitor Microsoft Corp. Bezos, whose Blue Origin space company won a contract in November to deploy rockets from NASA launchpads in Florida, is ranked 21st in the world with a $28.7 billion fortune. Blue Origin will develop a space vehicle that isn't scheduled to be ready until after 2020. Elon Musk's space-exploration company is close to winning the certification it needs to begin deploying satellites for the US military, according to an Air Force official. A contract win by Hawthorne, California-based SpaceX would be the first since the Pentagon opened the program in late 2012 to as many as 14 competitive missions. Musk added $2.9 billion to his net worth, most of which was the result of a 50 per cent gain by Tesla Motors, the world's largest electric-car manufacturer.

Bloomberg