Billionaires

In the last few months we've been noticing Russian billionaire Roman Abramovich doing a lot of spending. There was that pricey New York dinner, the lavish New Year's Eve party, the new house in Los Angeles. He seems to be doing quite well and he's not alone, Russia is making billionaires once again. The Moscow-based magazine Finans says that Abramovich remains one of Russia's top three richest men. The magazine's data reveals that all those in the top ten had a fortune of at least $9.95 billion. Two of the richest, Mikhail Prokhorov and Roman Abramovich were worth more last year, with $14.1 billion and $13.9 billion, respectively.

Businessweek reports that Russia gained 28 new billionaires bringing the total to 77 from 49 a year ago. That's a good number but not quite up to the 101 billionaires that were filling Russia's coffers in 2008. Finans states that the combined wealth of the 10 richest Russians now sits at $139.3 billion, up 84 percent over last year but still down from the $221 billion the 10 richest were worth two years ago.

The Golden State Warriors are for sale and billionaire Larry Ellison wants to buy, so what's the problem? It seems current team owner Chris Cohan is asking for too much money. He wants $400 million for the team today when he paid only $120 million when he bought it back in 1995. I'm no expert in valuing sports teams but that does seem like quite a jump, especially when the team has hardly been doing amazing things over the last 15 years.

Ellison seems determined, however, having been in talks with Cohan since last summer. He also seems a little frustrated, though, saying "I'm trying, I'm trying," and "Unfortunately you can't have a hostile takeover of a basketball team."

If Ellison does become owner of the Warriors his net worth of $22 billion will make him the richest NBA team owner in history.

Patricia Kluge, 61, is probably best known as the former wife of Metromedia billionaire John Kluge, although their divorce happened nearly 20 years ago. It takes a while for folks to forget about that much money. In the 1990s they were said to be the wealthiest couple in America known for their lavish parties and high-profile friends like Malcolm Forbes, Frank Sinatra and Katherine Graham. But more recently the English-Iranian Kluge has put her fortune to work.

Ten years ago she began planting grapes on her 1,800 acres of rolling Albemarle County, Virginia property - one of the most enviable plots of land in all of Virginia. Her ambition was to become the most prestigious winery on the East Coast and with advice from Robert Mondavi, top wine consultants from France and a state-of-the-art winery, she's getting there. Her wines, which sometimes seem a bit ambitiously priced, have done well in competitions (especially the Blanc de Blancs sparkling Chardonnay and sparkling rosé), are now available in 16 states and China, and she has one of the most lovely tasting rooms in the area.

Most recently in the news for putting her 25,000-square-foot, 45-room estate on the market for $100 million, Kluge and her husband, William Moses, are downsizing, but still keeping 1800 acres and the winery. They had architect David Easton build them a 6,500-square-foot "old Virginia"-style home on another portion of their land which they've designated to be "Vineyard Estates," an über-high-end community of which, they'll be the first residents.

On the 10 anniversary of her Kluge Estates winery, we asked Patricia to tell us everything:

1. What made you want to go into winemaking 10 years ago?

I've always loved wine, particularly the art of pairing wine and food. I'm an avid gardener and consider myself a steward of the land so I was not surprised to learn, when studying my genealogy, that I have farmers in my ancestry. For some time I would look out over the rolling hills and the many acres surrounding my home and felt that creating a vineyard and winemaking operation was a natural choice. I also researched this very thoroughly, studied the soils, consulted with experienced individuals within the industry. Their affirmation of my dream proved that my gut was pointing me in the right direction.

2. For many in Virginia a vineyard is something of a gentleman farmer's pursuit but from the start you have been very serious about making Kluge world-renowned. Did you ever consider just dabbling in it as a hobby?

Although I have hobbies, gardening for instance, I don't do anything halfway. I really throw myself into every endeavor and try to be as educated as possible. So to enter into the wine business with anything less than 100 percent commitment, the utmost passion and excitement never crossed my mind.

3. How close are you to your goal?

The problem with goals is that I keep raising the bar! When we started we had about 30 acres and a handful of varietals. We launched with three wines. Kluge Estate now has over 220 acres under vine, 8 varietals planted and 4 brands. My new goal is to see our wines available in all 50 states.

4. What have you learned in that time about the art/science of winemaking?

In addition to our fabulous vineyard staff and winemakers at Kluge Estate we work with two great consultants from France: Michel Rolland for our red program and Laurent Champs for our sparkling program. Their time in the field and blending in the cellar prove that there is an art and a science to it. There is a saying that anyone can be a cook but a handful of people study and train to become great chefs. There is that difference when working with an experienced winemaking team.

5. What's a common misunderstanding about wine?

I think people can take wine very seriously, to the point where the fun is taken out of it. As a business I do take it seriously but wine is meant to be enjoyed, shared and it can enhance an experience much like music. When I think of a meaningful evening, a great meal or special celebration, there is always wine involved.

In London today, $90 million in Russian art is going under the gavel, and the auction houses are hoping that a still robust community of Russian billionaires will come out in force to repatriate their heritage. Both Christie's and Sotheby's are holding auctions on December 1, 2 and 3, with MacDougall's, which specializes in Russian art, also selling on December 2 and 3. Bonhams is conducting one today.

There are some signs that the sales could go well. Sotheby's moved $13.8 million in Russian art at an auction a month ago, topping the $9 million presale estimate. The Russian government is saying the economy should grow next year, after falling 10 percent this year. If recovery is en route, big spending Russians may show up at this week's art auctions.

There's no shortage of Russian art coming on the market this week. In addition to the 540 lots being offered by Sotheby's, at a presale range of 14.8 million pounds to 21.2 million pounds, MacDougall's is selling 460 lots (12.5 million pounds to 17.6 million pounds), including a painting of a topless woman by Zinaida Serebriakova for between 1 million pounds and 1.5 million pounds. Christie's has 578 lots, with a presale estimate of 6.5 million pounds to 9.3 million pounds.

If the fears of hyperinflation are realized, you'll look back with pride on your luxury purchases. All that money you've sunk into custom jewelry and top-of-the-line stones will make you look like an absolute genius. Well, that's the position of South African billionaire Johann Rupert, and I'd take the advice of a guy who can be described that way.

According to Bloomberg News, the told investors, "If we enter hyperinflation, you're going to be so glad that you bought that stuff two months or six months ago." He added, "If inflation picks up, you're going to see people running into your stores, buying high jewelry."

Will inflation cause a mob to form outside the Cartier store on Fifth Avenue? Well, I don't think I'd worry too much about the pushing and shoving, but being ready to throw an elbow probably isn't a bad idea.

Of course, Rupert has something to gain – his company, Richemont, is the world's second largest luxury goods maker (behind LVMH). In his talk with investors in the company controlled by his family, he forecasted "normal growth" with luxury sales showing signs of recovery this month and next.

Ukraine is about to get a new contemporary art center. Victor Pinchuk is shooting to make Kiev a major art destination, so the wealthy art collector is creating a new center that will be larger than the existing PinchukArtCentre, which was the first private contemporary art center in the former Soviet Union and has had more than 830,000 visitors since its doors swung open in 2006.

Pinchuk, a steel billionaire, is an avid collector, with pieces by Jeff Koons, Damien Hirst and Andreas Gursky. His new endeavor, he tells Bloomberg News, "will make Kiev and Ukraine a fantastic place for contemporary art." Pinchuk made the proclamation at a show for 20 Ukrainian artists who were nominated for the first Pinchuk Art Center Prize, which comes with a cash component of $12,200 and a one-month internship with an artist from the international scene. Hirst himself will announce the winner on December 4, 2009.

Pinchuk has a strong relationship with the artist celebrity and owns "probably half" of the skull paintings (by the collector's own estimation) in the current Hirst show at the Wallace Collection in London. He also participated in Hirst's solo auction in September 2008 but wouldn't tell what he bought.

Collectors are looking and thinking. They might take action, but it's still too soon to tell. The action at Foire Internationale d'Art Contemporain (FIAC) in Paris is deliberate: nobody's rushing to put their cash on the table. However, there are signs that some pricey and prestigious pieces may sell.

Last week, a painting by Piet Mondrian was put on reserve, at a price between $30 million and $40 million. One of Pablo Picasso's works was reserved, as well, at $24 million. Back in the art boom, these pieces would have been snapped up already, but dealers are saying that it's taking longer to complete sales at FIAC this year than last year. Even billionaires need convincing in this market, it seems.

Also, there's a greater desire to stay under the radar. Whether it's to maintain some privacy or hide the fact that they have the means to spend more than they like, some owners and buyers are turning to private sales. Bargains, thus, won't make it into the public record – sparing sellers the embarrassment and preventing the other holdings of all collectors from sustaining a measurable decline in value. If premiums are paid, buyers won't have to reveal that they have the cash to pay more, preventing prices from increasing broadly.

No matter what is going on in the world, some country is always churning out billionaires. RIght now it's China. The Hurun Report in Shanghai recently released its Hurun RIch List which shows that the ranks of China's wealthy are growing at a rapid rate. The cut-off for the list was raised by 50 percent up to $150 million and as the Wall Street Journal reports, it still grew by 180 people. On the list there are 130 U.S.-dollar-equivalent billionaires. Hurun Report publisher Rupert Hoogewerf suspects the list may actually not reflect just how many billionaires there are in China because he says that many have built up wealth in a more private way. Car-battery maker Wang Chuanfu sits at the top of the list with $5.1 billion and China's richest woman, paper-recycling tycoon Zhang Yin is right after him in the second slot.

Despite the large flushing sound that's accompanied the art market this year, there are still 10 collectors worth noting. In fact, ARTnews was even able to cobble together a top 200 list this year (if they went to 300, I figure I'd wind up on the list, too, given the state of the art market right now). The names in the top 10 still represent the art collecting elite, they just happen to be in much worse shape than they were at this time last year.

Roman Abramovich, Russian billionaire and art addict, takes the #1 spot. It would be easy to zero in on any one of several purchases last year and call it "defining," but the man spent a few hundred million on art. The most expensive pickup was a Francis Bacon triptych which set him back almost $90 million.

Top 10 Art Collectors (according to ARTnews):

1. Roman Abramovich
2. Debra and Leon Black
3. Edythe L. and Eli Broad
4. Steven Cohen
5. Marie-Josee and Henry Kravis
6. Jo Carole and Ronald S. Lauder
7. Francois Pinault
8. Mitchell Rales
9. Carlos Slim Helu
10. Sheikh Saud bin Mohammed bin Ali al-Thani

Okay, so you take a quick look at this list and realize that Abramovich, who requested a bailout from the Russian government, isn't the only flawed personality it contains. Steven A. Cohen, the Connecticut-based hedge fund manager, owns a dead rotting shark. While Damien Hirst's ego is built to last, his creations are more like personal computers ... planned obsolescence. Kravis, who sits atop esteemed and powerful private equity firm KKR, was not left unscathed by the current financial crisis. The precipitous drop in oil prices over the past year must have left the sheikh in a rough spot, and Slim thought he could make money by investing in a newspaper (that's just fucking stupid ... almost as stupid as paying $90 million for a 1970s Bacon, frankly).

Maybe we'll see some changes over the next year. I wouldn't mind writing about an unknown visionary busting into the winners circle at this time next summer. Now, all we have to do is find one.

A $26 million yacht with Versace interiors owned by cab driver-turned-fertilizer king Tamir Sapir - who lives in Manhattan's famed Duke-Semans mansion (above) - was seized by customs officials in Miami this week over trophies made from the skins of endangered animals. The yacht, named the Mystère, was found to contain zebra skins, a jaguar skin rug, Bengal tiger and African lion heads, cigar boxes covered in elephant hide, a reticulated python cigarette holder, and large carved ivory tusks, the Miami Herald reports.

Sapir, an emigré from Russia whose $1.4 billion fortune is now mainly invested in real estate, will get the yacht back minus the gruesome décor after paying a $150,000 fine. Sapir bought the historic seven-story Duke-Semans mansion across from the Metropolitan Museum of Art from Doris Duke's relatives for $40 million after a single walk-through, and is now said to be spending $10 million on renovations including - get this - a gallery for his world-class collection of ivory. He is ranked at No. 522 on Forbes' Richest Americans list.

Forbes has just taken a look at the world's most promising billion-heiresses, introducing us to our new favorite filthy rich twins, Kathrine and Cecilie Fredriksen (above). The 25-year-old blonde daughters of Norwegian shipping magnate John Fredriksen, who's worth $4 billion, each have a seat on the board of directors of their father's companies. Kathrine became a board member of oil trading company Arcadia Petroleum earlier this year.

Cecilie has been on the board of Aktiv Kapital since 2006. The twins, based in London, have worked on various parts of their father's oil and shipping empire for several years. Others featured in Forbes' survey of 25 well-heeled hotties include Marta Ortega Perez, daughter of Spain's richest man - featured in our billion-heiresses post from last year (pictures here), Sir Richard Branson's daughter Holly and of course Ivanka Trump. Click here for a slideshow.

"Russian" and "art" together used to mean "stratospheric prices paid." Not any more. Last week's Russian art auction results at Christie's and Sotheby''s showed the difference a year can make. Last year, the two houses brought in $64 million at the New York-based annual ritual. This year, the final take was only $27 million.

At the Christie's auction, the top-selling piece was Svetoslav Roerich's "Portrait of Nicholas Roerich in a Tibetan Robe" for $2.9 million – thus accounting for more than 10 percent of both houses' sales. It set a record for works by Roerich. The next best was by Nicholas Roerich himself. "The Greatest and Holiest of Tangla," a landscape of Tibetan snowcaps, brought in $1.4 million.

Efforts to repatriate Russian art, of which I first learned from Annika Larres at the Bukowskis auction house in Helsinki, seem to have slowed, due in large part to the loss of so many Russian billionaires over the past twelve months.

Overall, Christie's moved 69 percent of the 390 lots available for $13.2 million. The father/son Roerich team accounted for a third of that. The Sotheby's auction, last Wednesday, was good for $13.8 million, compared to $46.5 million in 2008.

My colleague Deidre Woollard just reported that the number of millionaire households in the U.S. has shrunk to its lowest level since 2003. To that we can now add that the number of billionaires in the world has also seen a steep decline.

According to Forbes' newly-released annual list of the world's billionaires, there are now only 793 billionaires around the globe, down from 1,125 a year ago. That means 332 people lost their billionaire status.

This year the exclusive group has an average net worth of $3 billion, down 23% in 12 months, making for a loss of some $1.4 trillion. Americans now account for 44% of the money and 45% of the list's slots, up 7 and 3 percentage points from last year, respectively. Some billionaires have fared better than others, though most have lost masses of money.

Bill Gates lost $18 billion but regained his title as the world's richest man with a $40 billion fortune. Warren Buffett, last year's No. 1, saw his fortune decline $25 billion as shares of Berkshire Hathaway fell nearly 50% in 12 months, and is in the No. 2 slot with $37 billion. Mexican telecom titan Carlos Slim Helú maintains his spot in the top three but lost $25 billion, and is now worth $35 billion.

The world financial turmoil has led to be a bit of reshuffling in the list of Russia's richest men. The list from Russian financial magazine Finans reveals that Oleg Deripaska, once in the top slot, has fallen to eighth place (he's now worth $4.9 billion) after losing $35 billion and Mikhail Prokhorov now owns that title. Prokhorov was worth $14.1 billion at the end of last year, $200 million more Roman Abramovich, who despite his losses, has held on to the number two slot. The entire list has been cut in half, from 101 to 49.

Prokhorov first hit our radar last year when he announced that he was creating a magazine for the rich titled simply Snob. As Businessweek reports, the 43-year-old businessman was formerly major shareholder of Norilsk Nickel, Russia's biggest mining company, but he sold his 25% stake last April for $8 billion which meant that he had cash in hand when the financial crisis hit. Last summer, both Abramovich and Prokhorov were separately rumored to have picked up Villa Leopolda in Villefranche-sur-Mer on the French Riviera for $750 million but neither one did which is looking like a smart move in these turbulent times (or if he did buy it, he certainly wants out now).

The super-rich Saudi Arabian family of the world's most famous terrorist is feeling the pinch of the staggering economy, and has seen their fortune shrink by $1.3 billion over the past year, according to a new study.

Osama bin Laden's siblings own a major construction concern, headed by his brother Sheikh Tarek bin Laden (right); due to the credit crunch, they've seen their net worth fall from $8.5 billion to $7.2 billion, according to a new list of the world's richest Arabs by Dubai-based Arabian Business magazine.

Sheikh Tarek's latest project involves plans to build the world's longest suspension bridge, linking Africa with Arabia across the Bab al-Mandib (Gate of Tears), the strait connecting the Red Sea with the Gulf of Aden, at a cost of $200 billion; he plans to construct two new cities, one at each end, as well.

Elsewhere on the Arabian Rich List, which does not included royalty with the exception of those whose wealth has been achieved through business dealings rather than inheritance, Saudi Arabia's Prince Alwaleed bin Talal is ranked in the top spot with a $17 billion fortune, despite having lost $4 billion in the past year as well.