Forbes - USA (March 2018)

2018 special issue
the world’s richest people






















total
net worth:
i
.
1
t

r
n
o
$9.1 trillion private equity’s
$
l
l
9
i
2,208
2 , 2 0 8 engineer
billionaires robert smith
the secret behind
the secret behind
his $4.4 billion
his $4.4 billion
u
e
n
o
fortune
USA 585 fortune
r
t
f
cHiNA 373
RUSSiA 102
SAUdi ARABiA 0
PLUS
PLUS
MEET THE
LiST’S FiRST
$100 BiLLiON MAN
MExicANS RicHER,
TRUMP POORER
(SAd!)




from algeria to zimbabwe
the definitive almanac of global wealth









Contents // MARCH 31, 2018 voluMe 201 nuMbeR 2



vista equity
partners president
brian sheth (left) and
ceo robert smith.























































COvER StORy

36 | HOw tO BEAt wAll
StREEt And SiliCOn vAllEy
SiMultAnEOuSly
The American Dream is alive and well on Wall
Street thanks to Robert Smith, the richest black
person in America, who has figured out a way
to reengineer both private equity and enterprise
software—and used this secret playbook to build
a $4.4 billion fortune.
By NathaN Vardi


cover photograph by tim pannell for forbes


4 | FORBES MARCH 31, 2018

©2017 America’s Biopharmaceutical Companies. GoBoldly.com

















































THERE WERE THOSE WHO BELIEVED
THE BODY COULD NEVER FIGHT CANCER.


NEVER SAY NEVER.






















Today, researchers are using immunotherapy treatments to stimulate
the body’s immune system to destroy invading cancer cells.
Welcome to the future of medicine. For all of us.

MARCH 31, 2018

15 | FACt & COMMEnt // StEvE FORBES
Great medicine for trade.
lEAdERBOARd

19 | tHE wORld’S 20 RiCHESt
The list’s first $100 billion man (spoiler: not Bill Gates), a fresh
L’Oréal heir and a new wealthiest man in Asia.
22 | dOwn And OFF
A pizza empire goes cold, accounting troubles and other dra-
matic billionaire drop-offs.
24 | BilliOn-dOllAR CHECkOut
After a corruption crackdown in Saudi Arabia and the asset
handover that ensued, Forbes ejects the country’s formerly
super-rich.
26 | RESt in PROSPERity
Farewell to a hair-care king, a magazine mogul, a pharma boss
and more.
28 | vAuntEd MAnSiOnS
Former castles of the three-comma club, now on the market.
30 | wHitE HOuSE BluES
Donald Trump’s fortune has fared poorly under
his administration.
34 | FROM tHE vAult: BRAnSOn tHE BOld—
christopher patey / contour by getty images Airlines, records and cellphones—Virgin’s big leap into the 21st
July 3, 2000
century.
FEAtuRES


52 | tHE FORtunAtE SOn
For a decade India’s richest man waged a blood feud with
19
his younger brother for control of the subcontinent’s
telecommunications industry. Now Mukesh Ambani shares the
inside story of his ultimate triumph—Jio, an ultra-cheap 4G
broadband service whose biggest winners will be the millions
of ordinary Indians who suddenly consume more mobile data
than either the U.S. or China.
By NaazNeeN Karmali

58 | PERFECt tiMing
On his 55-year journey from penniless Italian immigrant to
multibillionaire cable magnate, Rocco Commisso has shown an
uncanny knack for being at the right place at the right moment—
and taking full advantage of it.
By Noah Kirsch
66 | tHE ARtiSAnAl induStRiAliSt
Francis Holder built a billion-dollar bread-and-pastry empire by
mixing American mechanical production with traditional French
techniques. Now the Henry Ford of baking is savoring his greatest
success—selling millions of macarons to the classes on Madison
Avenue and the masses at McDonald’s.
By chloe sorViNo






52



6 | FORBES MARCH 31, 2018

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MARCH 31, 2018


































58


tHE wORld’S BilliOnAiRES

75 | tHE 2018 AlMAnAC OF wEAltH
From Algeria to Zimbabwe, our definitive guide to the world’s 2,208
billionaires.
Algeria 76 Indonesia 97 Romania 106
Angola 76 Ireland 97 Russia 110
Argentina 76 Israel 98 Singapore 111
Australia 76 Italy 98 Slovakia 111
Austria 77 Japan 99 South Africa 112
Belgium 77 Kazakhstan 100 South Korea 112
Brazil 78 Kuwait 100 Spain 114
Canada 80 Lebanon 100 St. Kitts &
Chile 81 Liechtenstein 100 Nevis 112
China 82 Malaysia 102 Swaziland 114
Colombia 86 Mexico 100 Sweden 114
Cyprus 86 Monaco 102 Switzerland 116
Czech Republic 86 Morocco 102 Taiwan 118
Denmark 88 Nepal 102 Tanzania 119
Egypt 88 Netherlands 102 Thailand 118
Finland 88 New Zealand 104 Turkey 119
France 88 Nigeria 104 Ukraine 120
Georgia 93 Norway 104 United Arab
Germany 92 Oman 104 Emirates 120
Greece 93 Peru 106 U.K. 120
Hong Kong 94 Philippines 106 USA 122
Hungary 93 Poland 106 Venezuela 134
Iceland 97 Portugal 106 Vietnam 134
India 96 Qatar 106 Zimbabwe 134

140 | tHOugHtS
On abundance.
66



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inside scoop

Billionaire
editor-in-ChieF Billionaire
Steve Forbes
Hunters
Forbes Magazine Hunters
ChieF Content oFFiCer
Randall Lane
exeCutive editor
Michael Noer Shortly before 10 p.m., my hotel-room telephone rang, and a
art & design direCtor
Robert Mansfield stranger’s voice relayed a random Houston address. “Meet me in the
parking lot.” The tough-looking bald guy in the polyester shirt stuffed
Forbes digital
vP, digital editor me in his car and whisked me to a place called Luke’s Hamburgers,
Mark Coatney
where he bought me coffee, complained about the price—and began
vP, investing editor
Matt Schifrin haranguing me. I was a 24-year-old reporter for Forbes, and Jerry J.
svP, ProduCt and teChnology Moore, the biggest strip-mall developer in America, was determined
Salah Zalatimo
that we declare him a billionaire.
vP, WoMen’s digital netWork
Christina Vuleta He took me to his house—an 18th-century French château that
vP, video
Kyle Kramer he had ferried to Houston brick by brick—and then into his vast
assistant Managing editors underground garage, which housed 26 of his 700 or so antique cars.
Kerry A. Dolan, Luisa Kroll Wealth Moore instructed his accountant to churn out fanciful estimates for
Frederick E. Allen leadershiP
Loren Feldman entrePreneurs his 12,172,606 feet of Houston mall space. When I still wouldn’t bite,
Tim W. Ferguson Forbes asia Moore got more direct, offering me a P.R. job, at quadruple my salary,
Janet Novack Washington
Miguel Helft siliCon valley “with lots of golf.”
Michael K. Ozanian sPortsMoney Poor Jerry never
Mark Decker, John Dobosz, Clay Thurmond dePartMent heads
Jessica Bohrer vP, editorial Counsel made our billionaires
list. It’s a designation
business
Mark Howard ChieF revenue oFFiCer we take seriously, and
Tom Davis ChieF Marketing oFFiCer
Jessica Sibley senior vP, sales, u.s. & euroPe Forbes’ Wealth Team, led
Janett Haas senior vP, brand solutions & strategy by Kerry A. Dolan and
Ann Marinovich senior vP, Content PartnershiPs & strategy
Achir Kalra senior vP, revenue oPerations & strategiC PartnershiPs Luisa Kroll, guard the
Alyson Papalia vP, digital advertising oPerations & strategy gates better than anyone
Penina Littman vP, sales Planning & analytiCs
Nina La France senior vP, ConsuMer Marketing & business develoPMent in the world. Dolan and
Lisa Serapiglia direCtor Media Planning & oPerations Kroll oversee 13 full-time
Forbes Media reporters, 54 part-timers
Michael Federle ChieF exeCutive oFFiCer ForbesÕ ace Wealth Team.
Michael York ChieF FinanCial oFFiCer and the 14 Forbes licen-
Will Adamopoulos Ceo/asia Forbes Media sees across the world who feed us data. They take the same hands-on
President & Publisher, Forbes asia
Rich Karlgaard editor-at-large/global Futurist approach that I did as a rookie reporter, evaluating all 2,208 billion-
Moira Forbes President, ForbesWoMan aires one by one and combing through our database of suspects that
MariaRosa Cartolano general Counsel
Margy Loftus senior vP, huMan resourCes includes 5,000 more. “We dig deep,” says Kroll. “And each year we
build on the previous year and go deeper.” It’s one of the great report-
Founded in 1917
B.C. Forbes, Editor-in-Chief (1917-54) ing engines in journalism, the springboard for generations of Forbes
Malcolm S. Forbes, Editor-in-Chief (1954-90)
James W. Michaels, Editor (1961-99) stars.
William Baldwin, Editor (1999-2010)
Are all our estimates correct? Of course not, though we strive to err
on the conservative side. Have we found every billionaire in the world?
march 31, 2018 — volume 201 number 2 Not even close: Many, many hundreds remain hidden. It’s a pursuit
we relish, rooted in a simple philosophy: that free, fair markets crave
Forbes (issn 0015 6914) is published monthly, except January and July, by Forbes Media LLC, 499 transparency and people everywhere deserve to know who controls
Washington Blvd, Jersey City, NJ 07310, Periodicals postage paid at Newark, NJ 07102 and at additional PHOTOGRAPH By SARkIS DELIMELkON
mailing offices. Canadian Agreement No. 40036469. Return undeliverable Canadian addresses to APC
Postal Logistics, LLC, 140 E. Union Ave, East Rutherford, NJ 07073. Canada GST# 12576 9513 RT. POST- vast fortunes. Billionaire-hunting carries another dividend: Most on
MASTER: Send address changes to Forbes Subscriber Service, P.O. Box 5471, Harlan, IA 51593-0971.
our list are self-made, providing the kind of lessons that inspire 10-
ContaCt inForMation
For subscriptions: visit www.forbesmagazine.com; call 1-515-284-0693; or write Forbes Subscriber Service,
P.O. Box 5471, Harlan, IA 51593-0971. Prices: U.S.A., one year $34.99; Canada, one year C$52.99 (includes (and 11-, and 12-) digit fortunes. The global road map starts on page 75.
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Copyright © 2018 Forbes Media LLC. All rights reserved. Title is protected through a trademark registered
with the U.S. Patent & Trademark Office. Printed in the U.S.A.
—randall lane, ChieF Content oFFiCer
12 | FORBES MARCH 31, 2018

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FACt & COMMENt
“With all thy getting, get understanding”




Great medicine
G r e a t m e d i c i n e
for trade


BY STEVE FORBES, EDITOR-IN-CHIEF




HERE’S A HUGELY winning issue for New FDA head Dr. Scott Gottlieb has been
President Donald Trump that will deal removing obstacles, which is why the rate
with a gross trading abuse and simulta- of drug approvals has more than doubled.)
neously advance his goal of reducing the When a pharmaceutical company sells
prices of prescription drugs: Insist that a new drug overseas, buyers demand a
foreign buyers of American pharmaceu- price that’s a fraction of what American
ticals—almost without exception govern- customers pay. The demand is more in
ment agencies—pay their fair share of the line with a gangsteresque “We’ll make you
research and development costs of these an offer you can’t refuse” process than
medicines. Currently, Americans are subsi- normal business bargaining. The im-
dizing overseas users of our drugs. plicit—and sometimes explicit—threat is
Here’s how that works. The average price that if a company doesn’t cave the country
of successfully bringing a new medicine to market in the U.S. will allow a knockoff of the medication to be produced by
is about $2.4 billion. The entire approval process takes some 12 another company.
years before a drug receives its final green light. The expenses The U.S. should now make fair pricing of American
include all the would-be medicines that fail to make it out of drugs overseas a top trade priority: If you don’t want to pay
the research labs or falter during the Food & Drug Adminis- for our R&D, you won’t get our pills. Period. And if you try
tration’s expensive, time-consuming clinical trials. the imitation game, we’ll take painful retaliatory measures.
Pharmaceutical companies get 20-year patents for their Success with this would mean significantly lower costs
drugs, which means they really have about 8 years of monopoly for American consumers. The publicity surrounding the
power (20 years for the patent minus the 12 years for clearing issue would also educate Americans about how costly—
all the hurdles before a particular prescription can actually be and antiquated—much of our current approval system is,
sold). No wonder the initial price for a new drug is sky-high, thus generating political support for the kinds of reforms
even though the actual manufacturing cost per pill is minus- Scott Gottlieb is pushing at the FDA. A side benefit would
cule. (Ideally, when a drug goes “off-patent,” imitators rapidly be reducing FDA resistance to the president’s desire to let
bring copies, called generics, to market, slashing the price. terminally ill patients have the right to take medications that
Unfortunately, FDA regulations have gummed up this process. haven’t yet cleared bureaucratic hurdles for approval.

Hoover: an extraordinary Life
in extraordinary times
Kenneth Whyte (Knopf, $35)
WiSE HiStoRiAnS knoW better than to pigeonhole commerce secretary, undertook and brilliantly directed a mas-
notable figures—things are often just too complex—and with sive effort to alleviate the immense suffering wrought by the
no person has this been more true than Herbert Hoover, our great Mississippi flood of 1927. Without his decisive interven-
31st president. On one hand, he is one of history’s greatest hu- tion, the loss of life would have been incalculably worse.
manitarians, whose extraordinary and truly innovative efforts On the other hand, in 1933 Hoover left the presidency, after
literally saved tens of millions of people from starvation in Eu- one term, as probably the most vilified and hated individual ever
rope during and after World War I. John Maynard Keynes was to occupy the White House. He was caricatured as cold and in-
not alone at the time in regarding Hoover as one of the most different to the unprecedented human hardships brought on by
outstanding men of his age. In an era when Washington never the Great Depression. This greatest of economic disasters began
involved itself in disaster relief, Hoover, on his own initiative as on Hoover’s watch, and he was seen as incapable of successfully

march 31, 2018 FOrBES | 15

FOrBES
FACt & COMMENt STEVE FORBES

dealing with it. His political maladroitness way to enter public service back home. Hoover’s desire to help American farm-
and optimistic statements allowed him to Then the Great War broke out. Without ers, who were suffering from overproduction
be portrayed—even to this day—as out of anyone requesting it of him, Hoover im- and inadequate commodity prices, started
touch, overwhelmed and incompetent. His mediately took charge of getting more than this hideous ball rolling. He thought that put-
dour personality was in stark contrast to 100,000 stranded Americans back home. ting tariffs on imported commodities would
that of his successor, the ebullient, upbeat, It was an amazing effort in fund-raising, help; however, Congress didn’t stop there,
confidence-inspiring Franklin D. Roosevelt. logistics and improvisation. Then Hoover and slapped new or higher levies on just
FDR was no more successful than dived into the task of feeding some 9 mil- about everything under the sun. The pros-
Hoover at slaying this beast of hard times, lion people in German-occupied Belgium pect of a sweeping, destructive tariff law sent
as evidenced by the depression of 1937– and northern France. The Germans had the stock market crashing in the fall of 1929.
1938 during Roosevelt’s second term, when stripped these areas of foodstuffs, and the Whyte skillfully describes the legislative
unemployment surged to 20%. British naval blockade ensured that no food history of Smoot-Hawley and how Hoover
Kenneth Whyte’s comprehensive, well- could get through. Hoover persuaded the lost control of the process. He could easily
researched and fluidly written biography British to let food be delivered via neutral have vetoed the resulting monstrosity, yet
of this man of many contradictions paints shipping and the Germans not to comman- despite the warnings of hundreds of noted
as complete a picture as one could hope deer those provisions—and he organized economists, he signed the bill in June 1930.
for. Thankfully, Whyte doesn’t assume the the entire relief effort at minimal cost. A global contraction began.
role of many previous writers—prosecu- When the U.S. entered the war in 1917, Contrary to myth, Hoover was anything
tor or defense attorney. This fair-minded Hoover was made America’s food czar and but a do-nothing president as the disaster
masterpiece will be the standard reference again performed miraculously. After WWI unfolded. But he responded with a series of
for many years to come. ended, he saved tens of millions measures that either exacerbated the crisis
Hoover’s early life story of people in Russia and other or were ineffectual. Other countries were
would have delighted Abraham parts of Europe from famine in no better, enacting tax increases as their
Lincoln as an example of individ- the midst of the Russian Civil War. economies shrank. Germany, in particu-
ual effort overcoming immense After an amateurish run for lar, slapped on major hikes, deepening the
obstacles. The son of an Iowan the GOP presidential nomina- slump and fueling the rapid rise of the Nazi
Quaker blacksmith and his wife, tion in 1920, Hoover was named party. Hoover followed suit with a mas-
Hoover was orphaned at 9, and commerce secretary, a cabinet sive tax boost that overnight raised the top
he and his siblings were shipped backwater. He turned this sleepy income tax rate from 25% to 63% and hit
off to various relatives. For most agency into a dynamo of hyper- numerous items with higher excise taxes.
of his childhood Hoover was an activity, successfully pushing the While one may disagree with Whyte’s
outlier, always working hard but development of radio, aviation take on some issues, he is right in that
never receiving any real affection, which and even television. He promoted the es- many of Hoover’s policies actually laid the
helped account for his withdrawn person- tablishment of market standards and cost- foundation for Roosevelt’s New Deal.
ality and utter lack of social graces, traits saving techniques to help business and The economic calamity, as well as the
that proved to be lethal in the political make the running of government more public’s disenchantment with Prohibition—
world and, subsequently, to his reputation. cost-efficient. No cabinet secretary had had the repeal of which Hoover refused to sup-
Always an indifferent student, Hoover such a record of achievement since Alex- port—led to his crushing reelection defeat
nonetheless displayed his amazing organi- ander Hamilton. and banishment to the political wilderness.
zational abilities early on. He deftly reorga- No wonder Hoover coasted to the pres- After WWII President Harry Truman
nized the head office of his uncle’s business. idency in 1928, winning in a landslide. But called on Hoover to help with European
He was admitted to the first class of the new then it all fell apart. The very activism that relief efforts. He also appointed Hoover to
Stanford University in 1891, even though had made him such a success led Hoover head a commission on streamlining gov-
he flunked the entrance exams (the institu- into a series of catastrophic mistakes. ernment. He did a superb job, and many
tion needed students), and won the admi- Any discussion of the Great Depres- states created “Little Hoover Commis-
ration of the U.S.’ outstanding geologist. sion—its causes and what should have been sions” to do the same. These efforts and the
Hoover would have taken a post with the done—is always laded with intense contro- passage of time lessened the bitterness and
U.S. Geological Survey had it not been for a versy. It is in the world of interpretation that antagonisms of the Depression years, and
shortage of funds brought about by the de- one can debate some of Whyte’s conclusions. Hoover’s public standing improved.
pression afflicting the country at the time. In this reviewer’s mind, Hoover’s biggest The controversies surrounding the De-
After Stanford, Hoover went to work disaster was signing the Smoot-Hawley pression will forever arouse debate and dis-
in the mining business in China and else- Tariff Act into law. It slapped new or higher cussion, but Whyte’s book is indispensable
where, achieving dazzling successes. By the taxes onto thousands of import items, pre- to understanding the extraordinary man
age of 40 he was an immensely rich man, cipitating a global trade war that sent econo- at the center of the storm—and to appre-
working out of London and looking for a mies around the world into a tailspin. ciating how much he did for humanity. f



16 | FOrBES march 31, 2018

A.I. is making quite an impression.








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LeaderBoard




22 24 26 28 30
BILLIONAIRES WHERE HAvE ALL THE RECENTLY BILLIONAIRE WHITE HOUSE
NO MORE THE SAUDIS gONE? DEPARTED HOMES FOR SALE BLUES




















1. JEFF BEZOS
$112 billion 
U.S.
the richest person on earth,
amazon’s chief is the first
centibillionaire atop our annual
ranking. Shares of his e-commerce
colossus rose 59% in 12 months,
helping lift his fortune by
$39.2 billion, the biggest one-
year gain ever recorded.
(the $27.6 billion increase he
logged in 2017 ranks third.) bezos
also owns the Washington Post
and aerospace firm blue origin.

















billionaires
The World’s


20 richesT



THE VERY WEALTHIEST people on the planet are worth a staggering $1.2 trillion—
a sum roughly equivalent to the annual economic output of Mexico. In aggregate, their
riches represent 13% of the total fortune of all 2,208 billionaires worldwide. The minimum
figure for admission to this august club: $39 billion, up 28% from $30.4 billion a year ago.


photograph by Daniel berman/reDux


MARCH 31, 2018 FORBES | 19

LeaderBoard 5. MARK ZUCKERBERG

billionaires 3. WARREN BUFFETT $71 billion 
U.S.
$84 billion 
2. BILL GATES U.S. Facebook’s Ceo faces pressure
$90 billion  in January the octogenarian 4. BERNARD ARNAULT over his social-media giant’s role
U.S.
1. JEFF BEZOS Cedes the top spot for only promoted two berkshire hatha- $72 billion  in russia’s election meddling. Still,
$112 billion  way executives to vice chairman FrancE the company’s shares rose 32% in
U.S. the sixth time since 1995. the roles—a step toward a much- record results at his luxury the past year, adding $15 billion to
microsoft cofounder’s net empire lVmh and a deal to buy
(See previous page.) anticipated succession plan. his net worth.
worth rose $4 billion in the buffett, who says he’s in “remark- out nearly all of Christian Dior
past year, but that was no helped boost arnault’s fortune by
match for bezos’ epic increase. ably good health,” continues to $30.5 billion.
run berkshire, whose stock is up
16% since last year.
6












15
14
11 13 16











12

4



3 2





11. MICHAEL BLOOMBERG
$50 billion 
U.S.
new york City’s former mayor continues
to run his financial-information and
media firm, bloomberg lp. a gun-control
organization he backs, meanwhile, is
forming a new initiative geared toward
students in the wake of the school shoot-
ing in parkland, Florida. 15. S. ROBSON WALTON
13. SERGEY BRIN $46.2 billion 
$47.5 billion  U.S.
U.S. Sam Walton’s oldest son was
12. LARRY PAGE page’s partner as google’s Walmart’s chairman for 23 years.
$48.8 billion  cofounder is america’s richest 14. JIM WALTON he’s now one of three family
U.S. $46.4 billion  members still involved in the
the google cofounder, now immigrant. now alphabet’s presi- U.S.
Ceo of its parent, alphabet, has dent, brin is reportedly spending the youngest son of Walmart company; he and Steuart Walton,
the son of Jim Walton, sit on
reportedly been in talks with over $100 million on the world’s founder Sam Walton sat on
Saudi arabia to build a technol- largest airship for both personal the company’s board until 2016. its board. his son-in-law gregory
penner is chairman.
ogy hub inside the kingdom. luxury travel and delivering aid to he runs the family’s regional
page’s fortune grew $8.1 billion remote locations. bank, arvest.
over the past year.
20 | FORBES MARCH 31, 2018

10. LARRY ELLISON
8 (TIE). 8 (TIE). $58.5 billion 
U.S.
6. AMANCIO ORTEGA CHARLES KOCH DAVID KOCH even as oracle faces competition from
$70 billion  $60 billion  $60 billion  Salesforce and amazon in the cloud
Spain U.S. U.S.
most of his fortune is tied up in in november his $100 the Koch industries market, its stock has risen 13%. ellison, who
owns about a quarter of the company, is
inditex, best known for fashion 7. CARLOS SLIM HELU billion (sales) Koch in- executive vice presi- $6.3 billion richer.
chain Zara. its shares have $67.1 billion  dustries launched Koch dent and his brother
MExico
sagged, helping knock $1.3 billion Slim is worth $12.6 billion more Disruptive technologies, Charles made news in
off his net worth. than a year ago, due mostly to a venture-capital arm november when their
investment arm put
a 39% jump in the stock of his run by his son Chase; $650 million toward
it has already led a
telecom firm, américa móvil.
$150 million investment meredith Corp.’s $2.8
in an israeli medical- billion purchase of
device startup. struggling magazine
publisher time inc.
19 1

17
20










8 8 7












10 5





18












20. JACK MA
16. ALICE WALTON
$46 billion  18. FRANÇOISE $39 billion 
china
U.S. 17. MA HUATENG
Sam Walton’s only daughter $45.3 billion  BETTENCOURT MEYERS 19. MUKESH AMBANI ma took e-commerce behe-
has no role in the family china $42.2 billion ★ $40.1 billion  moth alibaba to new heights
FrancE
india
business but still holds plenty ma is asia’s wealthiest person her mother, l’oréal heiress liliane the indian tycoon is back in the in 2017, inking its first olym-
of Walmart shares, making for the first time, thanks in bettencourt, died in September pic sponsorship and scoring
her the richest woman in the part to his firm tencent’s 2017; bettencourt meyers and her top 20 for the first time since a streaming agreement with illuStration by miChael Witte
world. WeChat, a ubiquitous social- family inherited the fortune. 2012 (see story, page 52). Disney. alibaba’s shares
messaging app with nearly have increased 76% since
1 billion active users. tencent last year, boosting him into
also has stakes in tesla, Snap- the top 20 for the first time.
chat parent Snap and music-
streaming service Spotify.
MARCH 31, 2018 FORBES | 21

LeaderBoard

drop-offs
NAMe
cOUNTRy | SOURcE OF WEALTH
DOWN AND OFF 2018 net worth
SteveN rOth
OVER THE PAST YEAR, 120 individuals fell from the global billionaire ranks. China U.S. | REAL ESTATE
lost the most—50 ten-figure fortunes—while 26 Americans and all 10 Saudi Arabians $970 million
(see page 24) also dropped out of the three-comma club. The four former billionaires below ANAS SeFriOui
MOROccO | cONSTRUcTION
experienced especially dramatic drops; 20 other notables are at right. To see all 120 people
$950 million
who fell off the list, go to forbes.com/billionaires-dropoffs.
eSther Grether
SWITZERLAND | SWATcH
$900 million
MAGGie MAGerKO
U.S. | 84 LUMBER
$900 million
O. BrutON SMith
U.S. | SPEEDWAy MOTORSPORTS
$880 million
eDWArD StAcK
U.S. | DIcK’S SPORTING GOODS
$880 million
BryAN SheFFielD
U.S. | OIL ExPLORATION
$870 million
DAviD hiNDAWi
U.S. | cyBERSEcURITy
$850 million
AyMAN ASFAri
JOhN SchNAtter U.K. | OIL SERvIcES
U.S. | PAPA JOHN’S PIZZA $840 million
2018 NET WORTH: $750 MILLION (DOWN 25%)
Schnatter blamed slowing growth at his Papa John’s pizza chain partly on the NFL’s “poor leadership” in JONAthAN OriNGer
handling national anthem protests. Football fans eat a lot of pies, and Papa John’s is a major NFL sponsor. U.S. | SHUTTERSTOcK
$820 million
KeN GrOSSMAN
U.S. | SIERRA NEvADA BEER
$800 million
JANNie MOutON
SOUTH AFRIcA | FINANcIAL SERvIcES
$800 million
ShOJi uehArA
JAPAN | PHARMAcEUTIcALS
$800 million
WANG JuNMiN
cHINA | PHARMAcEUTIcALS
$800 million
AlDO BeNSADOuN
cANADA | SHOES
$780 million
DANil KhAchAturOv chriStOFFel WieSe
RUSSIA | INSURANcE, SOUTH AFRIcA | RETAIL WilBur rOSS
BANKING, REAL ESTATE 2018 NET WORTH: $600 MILLION (DOWN 89%) U.S. | PRIvATE EqUITy
2018 NET WORTH: An accounting scandal ravaged Steinhoff International, a home-goods $700 million
$170 MILLION (DOWN 92%) retailer that forms a major part of Wiese’s expansive empire. He resigned as
eDGAr SiA
His insurance company, chairman in December; company shares have lost nearly 87% of their value. PHILIPPINES | REAL ESTATE
Rosgosstrakh, was absorbed by $650 million JAMEL TOPPIN; DARREN TASS/ZUMA PRESS/NEWScOM; INGE PRINS; GERRISH/DARREN GERRISH/GETTy IMAGES
Otkritie Bank in 2017; Russia’s
BOriS MiNtS
central bank then nationalized
troubled Otkritie in December. RUSSIA | REAL ESTATE, PENSION FUNDS
$540 million
NirAv MODi li FucheNG
INDIA | DIAMOND JEWELRy cHINA | AGRIBUSINESS
2018 NET WORTH: LESS THAN $100 MILLION (DOWN 94%) $500 million
State-run Punjab National Bank alleged in January that Modi BruNO SteiNhOFF BY DENIZ ÇAM AND NOAH KIRSCH
and his business partner had colluded with some executives at GERMANy | HOME GOODS RETAIL
the bank’s Mumbai branch to conduct fraudulent transactions, $225 million
resulting in a reported $1.8 billion flowing into Modi’s jewelry
companies. Modi, who left India before the scandal broke,
reportedly denied the allegations.
22 | FORBES maRch 31, 2018

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LeaderBoard


drop-offs
hotel

saudi arabia MohaMMed al aMoudi
$8.1 billion
Assets include a swedish refinery,
It’s hard to ImagIne a saudi gas stations and an ethiopian
faster or more audacious way to conglomerate (gold mining, farming,
obtain billions of dollars than construction).
the route recently taken by Saudi
Crown Prince Mohammed bin
Salman: force the country’s
richest people to turn over their
personal fortunes to the state Prince sultan bin MohaMMed
bin saud al Kabeer
as part of an “anticorruption $3.8 billion
campaign.” his publicly traded Almarai dairy
Late last year the 32-year-old company is among the largest in the
middle east.
heir to the throne locked up a
group of Saudi billionaires and
other businessmen at an ultra-
luxe prison—the 492-room,
palm-lined Ritz-Carlton Riyadh. Prince alwaleed
Some were his own relatives, bin talal MohaMMed al issa
including Prince Alwaleed Bin $18.7 billion $2.6 billion
chairs publicly traded kingdom his Assila investments has stakes in a
Talal, 62, the most recognizable holding, which has investments bank, a food processor and hotels.
Saudi mogul in the West. in lyft, twitter, citigroup and
the Four seasons.
Alwaleed and many others
have been released, but checking
out of the Ritz-Carlton cost
billions. There are a thousand
saleh KaMel
and one stories about what $2.3 billion
precisely happened, making it Founded dallah Albaraka conglomerate
impossible to know definitively (real estate, food, health care).
who gave how much to whom
when. Given these shifting sands
of truth, we’ve chosen to leave all
ten Saudis off our billionaires list
this year; none would comment.
abdullah al rajhi
With greater clarity regarding $1.9 billion
their wealth, some might with brothers, built Al rajhi Bank, one
of world’s largest islamic banks.
eventually return to the ranking.




abdul Majeed alhoKair AlwAleed: Ben BAker/redux Pictures; sAleh-kAmel : Amer hilABi/AFP/Getty imAGes; ritz: AndreA hAnks/zumA Press/newscom
$1.2 billion
salMan alhoKair
$1.2 billion
Fawaz alhoKair
$1.2 billion
BY KERRY A. DOLAN AND CHRISTOPHER HELMAN
the three brothers’ real estate empire
includes 19 shopping malls.




MohaMMed seraFi
$1.1 billion
The Ritz-Carlton Riyadh real estate investor.


24 | FORBES maRch 31, 2018

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Consider the investment objectives, risks, and charges and expenses carefully before investing. For a prospectus
or, if available, a summary prospectus containing this and other information, call us. Read it carefully.
*36 of our 39 Retirement Funds had a 10-year track record as of 12/31/17 (includes all share classes). 34 of these
36 funds beat their Lipper averages for the 10-year period. 38 of 39, 39 of 39, and 35 of 36 of the Retirement Funds
outperformed their Lipper average for the 1-, 3-, and 5-year periods ended 12/31/17, respectively. Calculations are
based on cumulative total return. Not all funds outperformed for all periods. (Source for data: Lipper Inc.)
Past performance cannot guarantee future results. All funds are subject to market risk, including possible loss of principal.
T. Rowe Price Investment Services, Inc., Distributor.

LeaderBoard

deceased
Peter Alfond | 65
rest in ProsPeritY U.S., $1.4 bil | ShoeS
Americo Amorim | 82
PortUgal, $4.4 bil
energy, inveStmentS
Late Last yeaR, Toronto police made a chilling discov-
ery: the strangled bodies of 75-year-old generic-drug bil- Belmiro de Azevedo | 79
PortUgal, $1.5 bil | retail
lionaire Bernard “Barry” Sherman (left) and his wife, Honey,
liliAne Bettencourt | 94
hanging beside their indoor pool. Sherman was not a man
France, $39.5 bil | l’oreal
who shied away from conflict; he battled competitors in court
Arnold clArk | 89
and engaged in a decade-long lawsuit with his cousins over
U.K., $1.1 bil | aUtomobileS
an ownership stake in his firm, Apotex. The deaths are being
dAvid consunji | 95
investigated as homicides, but no suspects have been named. PhiliPPineS, $3.1 bil | conStrUction
His death is by far the most lurid of those of the 25 billion-
sAnford diller | 89
aires (listed on this page) who died in the past year. “People tell U.S., $1.7 bil | real eState
me life is short, and I say, ‘Yeah, so I better get the work done,’ ” desh BAndhu GuPtA | 79
Sherman said in his first appearance in Forbes, in July 2000. india, $4.7 bil | PharmaceUticalS
Here’s how we first covered four other recently deceased titans. Bruce hAlle | 87
U.S., $6.5 bil | tireS
dorrAnce hAmilton | 88
U.S., $1.3 bil | camPbell SoUP
niklAs herlin | 53
Finland, $1.4 bil
elevatorS, eScalatorS
erich kellerhAls | 78
germany, $1.8 bil
electronicS retail
kArl-heinz kiPP | 93
germany, $4.5 bil | retail
lu GuAnqiu | 72
china, $5.7 bil | diverSiFied
sieGfried meister | 78
germany, $3.8 bil | aPPlianceS
neAl PAtterson | 67
U.S., $1.5 bil | health care it
A. jerrold Perenchio | 86
U.S., $2.8 bil | SPaniSh-langUage tv
dAvid rockefeller sr. | 101
jon huntsmAn, 80 U.S., $3.3 bil
henrY hillmAn, 98 real eState, inveStmentS
U.S., $1 bil | chemicalS
U.S, $2.6 bil | inveStmentS
“Jon huntsman is a rare joAn tisch | 90
“through hillman land, the family
combination. he is both a U.S., $3.8 bil | inSUrance, n.y. giantS
investment holding company, henry
great dealmaker and a great
hillman owns, controls or otherwise Yeoh tionG lAY | 87
operating businessman.
influences enough other companies malaySia, $2.1 bil
the two rarely go together.
to make most conglomerators green conStrUction, real eState, Power
in him they do.” (November
with envy. he is a director of no less
27, 1989) net worths from billionaires 2017.
than ten major companies.”
(September 15, 1969)
sAmuel “si”
newhouse jr., 89 Sherman: dicK loeK/toronto Star/getty imageS; newhoUSe: FranciS miller/the liFe PictUre collection/getty imageS
U.S., $12.1 bil | media
“Since the death of founder
S.i. newhouse Sr. last
august, his sons, Si, 52, and
leAndro rizzuto, 79 donald, 50, have been the
U.S., $4.5 bil | conSUmer ProdUctS two chief executives. . . .
“hair dryers had been around since the the biggest problem the
twenties, but no one until rizzuto had family must deal with . . .
noticed that by greatly increasing air has to do with the changing
velocity and heat in careful mixture, nature of communications. By Madeline Berg and Michela Tindera
a handheld dryer and a brush could newspapers now face more
replace most of the hairdresser’s existing competition than ever
tools and do the job four times faster.” before, especially in big-city
(September 3, 1979) markets.” (October 29, 1979)
26 | FORBES maRch 31, 2018

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LeaderBoard

Live Like a BiLLionaire

D
VaunteD Mansions
VaunteD Mansions
ALThough WArren BuffeTT has lived in the same home since 1958,
other billionaires swap houses the way the rest of us change light bulbs. Most of
the billionaire-owned properties currently for sale were purchased or completed
in the last five years; a few have never been lived in at all. Agents say the ultra-
wealthy’s wandering ways are easy to explain: They want only the best.


thoMas tull
Net worth: $1.1 billioth: $1.1 billioN
Net worth: $1.1 billioN
Net wor
e
a
i
iNmeNt
a
r
t
t
t
N
Source: eNter
e
Source: eNtertaiNmeNt
listing: 3970 Victoria lane
listing: 3970 Victoria lane

l
s
t
V
a
(Westlake Village, ca)
e
(
(Westlake Village, ca)
k
e
g
W

,
e
l
l
i
a
Vitals: a 32,000-square-foot
french romantic mansion with 12
bedrooms and 18 bathrooms on a
33-acre lot.
Posh aMenities: the grounds
include a 5-acre organic farm,
a garden inspired by monet’s
“Giverny” and a private museum.
asking Price: $85 Million
Michael Dell
Net worth: $22.7 bil
Net worth: $22.7 bil
Source: Dell computerS
Source: Dell computerS
listing: casa Dell
listing: casa Dell
t
i
i
s
:

n
g
o
(los cabos, Mexico)
o
c
(los cabos, Mexico)
i

s
Vitals: a 9,990-square-foot
mediterranean villa with five Jeff greene
Net wor
Net worth: $3.8 billioth: $3.8 billioN
bedrooms, six full and three Net worth: $3.8 billioN
l

e
a
Source: real eState, iNveStmeNtS
r
e
half-bathrooms and nearly Source: real eState, iNveStmeNtS
listing: Palazzo Di aMore
o
r
e
:

listing: Palazzo Di aMore
g
P
a
z
a
l
n
i
s
D

t
i
o
z
4,700 square feet of terraces.
(9505 lania lane, beVerly hills, ca)
(9505 lania lane, beVerly hills, ca)
(
y

b
r
l
e
0
5
9

5
Posh aMenities: located 282
feet above the sea of cortez Vitals: a 35,000-square-foot, 12-bedroom, 23-bath
on mexico’s Baja peninsula, estate on a 25-acre lot.
the property boasts sweeping Posh aMenities: the property’s 15,000-square-foot
water views and comes with a entertainment center houses a ballroom, a screening
collection of art by emerging room and a bowling alley. there’s also a working
latino and mexican artists. vineyard and a 27-car garage.
asking Price: $129 Million
asking Price: $18.5 Million
Petra ecclestone stunt
o
N
et wor
Father’S Net worth: $3.5 billioth: $3.5 billioN | Source: Formula oNe
Father’S Net worth: $3.5 billioN | Source: Formula oNe
i
listing: the Manor (594 south MaPleton DriVe, holMby hills, ca)
listing: the Manor (594 south MaPleton DriVe, holMby hills, ca)
s
g
:

t
i
n
n

t
o
,
D

e
r
e
l
P
Vitals: owned by a daughter of f1 founder Bernie ecclestone, a
56,500-square-foot mansion with 14 bedrooms and 27 bathrooms on 4.7 acres.
Posh aMenities: the manor’s 123 rooms include a nightclub, a hair salon
and a private spa.
ProVenance: Built for the late producer aaron spelling and his wife, candy,
who famously had rooms for cutting flowers and wrapping gifts.
asking Price: $200 Million
a. JerrolD Perenchio
l
Net worth: DeceaSeD; $2.8 bil iN maY 2017 | Source: uNiviSioN
i
Net worth: Deceath: DeceaSeD; $2.8 bil iN maY 2017 | Source: uNiviSioN


2
i
Y
Net wor
$
2

;
D

b
.
8
:

c
e
u
v
i
N
i
r

|
7
0
1

o
u
S
listing: chartWell (bel air, ca)
listing: chartWell (bel air, ca)
b
r
,
a
i
l
e


Vitals: the 25,000-square-foot french neoclassical mansion has
10 bedrooms and 12 bathrooms on a 10.3-acre lot. Jeff Greene: newscom; Petra ecclestone: B.o’Kane/alamy
Posh aMenities: the property includes a ballroom, a tennis court
and a 40-car garage.
ProVenance: land with a house once owned by ronald and nancy
reagan is now part of the property, and chartwell’s exterior was made
famous as the clampett estate on The Beverly Hillbillies. by Samantha Sharf
asking Price: $350 Million
28 | FORBES maRch 31, 2018

ENEMIES ARE MADE TO BE BROKEN









































































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LeaderBoard

trump
white house blues

Over the last 12 months, President Trump’s fortune has fallen $400 million, to $3.1 billion. Except for a
complete wipeout during George H.W. Bush’s administration, his financial performance has been the weakest
during his own presidency. Trump’s most lucrative years? Obama’s, when he added $2.9 billion to his net worth.
$5,000 MIL DonalD trump
–$400 mil
–$400 mil
george
h.w. bush george w. bush baraCk obama
–$1.7 bil +$1.3 bil +$2.9 bil
4,000


ronalD reagan bill Clinton
3,000 +$800 mil +$1.7 bil





2,000




1,000





’82 ’84 ’86 ’88 ’90 ’92 ’94 ’96 ’98 ’00 ’02 ’04 ’06 ’08 ’10 ’12 ’14 ’16 ’18
Sources: The Forbes 400 (1982–2000); Forbes’ World’s Billionaires (2001–present).
what trump owns
40 wall st. ten golf Courses in Cash/liquiD assets one irish anD seven springs home
NYC six u.s. states plus $134m two sCottish private estate Beverly Hills
$395m washington, D.C. p $4M golf Courses Bedford, N.Y. $11m
p $32M $205m $50m $24m p $500K
p $7M trump tower q $28M p $9M
1290 avenue of penthouse trump
the ameriCas hotel NYC trump parC/ trump international
NYC management $64m trump parC east worlD tower hotel & tower
$391m anD liCensing tu  NYC NYC NYC
p $44M $170m $47m $23m $11m
q $50M trump q $40M tu q $19M
555 California st. international
San Francisco trump park avenue hotel las vegas trump winery spring Creek Consumer
$347m NYC $57m Charlottesville, Va. towers proDuCts liCensing
p $27M $161m q $18M $30m Brooklyn, N.Y. $6m
q $29M tu $18m q$4M
trump
trump tower international two airplanes, q $14M trump
NYC mar-a-lago hotel three heliCopters home international
$245m Palm Beach, Fla. washington, D.C. $30m St. Martin, West Indies hotel & tower
q $41M $160m
q $15M $53m q $5M $15m ChiCago
niketown trump national q $51M trump plaza NEWLY INCLUDED $6m
NYC Doral miami NYC ASSET q $94M
$228m golf resort $28m homes warehouse BY DAN ALExANDEr Collage: JJoHN WeBer
q $137M $149m p $9M Palm Beach, Fla. Charleston, S.C.
q $21M $15m $4m
total net worth: $3.1 billion p $500K tu
(Down $400m)








30 | FORBES maRch 31, 2018

PHENOM 300: PERFORMANCE SECOND TO NONE



“That first feeling of the ramp presence was what really attracted me to the Phenom 300. I remember seeing

the airplane and taking a bunch of pictures; I was just so struck by the presence of the plane sitting there. And
then you start looking into its performance, and you sit in the cockpit and get familiar with the systems design
and what it’s really going to be like flying the aircraft, and it just seemed like a natural fit for me – and, of course,


my wife loved it too!
The engineers have done an incredible job. I really appreciate the Phenom 300’s modern design, and it just
strikes me – week after week, month after month, as I own the plane – how well-thought-through things are: from
how the redundancy works, to where things are placed, to the CAS messaging system when you have things that
you need to work through in flight.


I have a lot of confidence getting in the airplane. The performance of the Phenom 300 is just second to none.


It’s the biggest single-pilot machine you can fly in the sky, and I really like that.”
- Dan McGee, Technology Executive
Watch Dan’s story and request more information at
EmbraerExecutiveJets.com/Dan

The best-selling business jet in the world four years in a row, Embraer’s Phenom 300 platform achieved breakthrough status and dominated as the fastest, longest
range single-pilot aircraft on the market. And now, with the introduction of the brand-new Phenom 300E, a whole new standard in value and customer experience
has been set. Designated “E” for “enhanced,” this modern, clean-sheet light jet delivers top-tier performance and next-generation avionics, along with a revolutionary
new interior design for improved ergonomics, ease of maintainability, advanced connectivity and unmatched comfort and space. Add to that the industry-exclusive
upper technology panel, plus a generous baggage compartment and low operating costs, and it’s easy to see why the Phenom 300E is truly in a class by itself.

PromoTion


How Communications Service Providers


Can Lead theDigital Transformation






By SuSan Burnell

ransforming an industry is incredibly
complex, difficult and risky. Compa-
nies like Amazon, Apple and Google
have successfully transformed their
T industries; in the process, they raised
the bar on consumer expectations. Their cus-
tomers expect to have the service or prod-
uct they want, when they want it, using the
device they choose.
Those expectations now transcend calling
for an instant ride, fast shipping or smart digi-
tal assistants. They apply to entertainment,
information and connection with others
around the globe.
“The exponential pace of change in digi-
tal interactions and commerce requires that
companies’ business models and business
strategies change at an equally rapid pace,”
says Brian Shepherd, EVP and group presi-
dent at CSG. “This converging wave of busi-
ness innovation will continue to reshape the
future winners and losers in our telecommu- The past several years have seen a great transformation will position them as DSPs
nication, Pay TV and media markets.” deal of shake-up in the CSP landscape for a world of connected consumers. Yet
It’s a world that communications service — with waves of disruption crashing and operators need the right digital business
providers and content providers must navi- rippling through the industry from all direc- support systems to get there.
gate with more speed and skill than ever tions. Disruption can create confusion as
before. Their customers expect more, and are well as opportunity. Helping CSPs Innovate And Evolve
already primed for the next industry transfor- Tech giants like Apple, Facebook and CSG understands the challenges CSPs face.
mation. Yet how ready are CSPs to accom- Google explored the television arena already A global leader in providing business sup-
plish a successful evolution? shaken by Netflix and Amazon in 2016, port solutions, CSG simplifies the complex.
opening up opportunities for streaming, Using innovative thinking and technology, it
Opportunity From Disruption tech and cable providers to work together. drives business transformation initiatives for
“Lines are blurring between cable and tele- The rise of social media gave content offer- the majority of the top 100 global commu-
com. Lines are blurring between communica- ings a facelift with short-form content, pro- nications service providers, including AT&T,
tions and entertainment providers,” says Ken viding a disruptive opportunity for every Verizon, Comcast, Vodafone, Charter Com-
Kennedy, EVP and president, technology and player. Content developers like HBO, ESPN, munications, ESPN, Telstra, Hutch 3, iFlix,
product at CSG. “We will see these industry Disney and others began offering their solu- TalkTalk and Telefonica.
categories further break down when it comes tions directly to consumers in addition to In the most rapidly evolving environments
to defining the customer experience. Brands, their traditional cable and satellite distribu- imaginable, CSG helps customers conquer
regardless of their origin industry, will look for tion channels. any challenge without business disruption.
new ways to transform their business models Meanwhile, throughout the entire sector, “We make their challenges our own,” adds
to deliver new services and deliver the best organizations were wrapping their heads Shepherd. “In the process, we enable trans-
possible customer experience.” around the extensive range of new technolo- formative change with minimal risk and
Communications service providers face gies and skills needed to turn the internet of maximum value, and our customers emerge
new market dynamics daily. Rapid innovation things into business value. as winners in the market.”
means last month’s business strategies may As lines between industries blur, CSPs
not work today. There’s an urgent need for are searching for more than just a digi-
new digital products and services to replace tal transformation; they need an entire Learn more at
evaporating legacy revenue streams. business model transformation. The ideal csgi.com/digitaltransformation
1 Technology

OUTPACE.



OUTMANEUVER.




OUTLAST.







































The pace of today’s digital world means keeping up isn’t fast enough—
you have to already be ready. CSG has always embraced technological

change, and our powerful suite of solutions gives your business the
agility, scalability and cost efficiencies it needs to thrive. We can
empower you to launch and monetize digital services in 90 days or
less. Because that’s the speed it takes to lead.

Learn how CSG can help you transform your business at
CSGI.COM/DIGITALTRANSFORMATION






© 2018 CSG

LeaderBoard

from the vault

braNsoN the bold: July 3, 2000


“MY BIGGEST WEAKNESS in life is that I can’t say
no,” said Richard Branson, flashing his trademark
grin. “If the consumer benefits, I see no reason why we
should be frightened about launching new products.”
His voraciousness had turned Virgin into a conglomer-
ate with an estimated $5 billion in sales and interests in
airlines, entertainment, rail and telecom. All of it was
built on the strength of one man’s personality: Virgin
was Branson, and Branson was Virgin. He had no
second-in-command—nor, seemingly, even any
salesmen who were able to keep up with their manic
billionaire boss. “It would be quite nice to have some
young, fresh blood getting out there and promoting the
companies,” he told us, sighing.
Virgin’s headlong pursuit of new markets led Forbes
to ask: “Can a famous brand survive such promiscuity?”
Well, it hasn’t just survived; it has flourished, despite
missteps like VirginStudent, an early social network,
and Virgin Cars, an online auto retailer. Virgin’s com-
bined revenue now exceeds $20 billion, and Branson
is currently toying with building a hyperloop in India.



Notable aNd
Newsworthy
buffett’s bad year








sigN oF the times
Look out below! Fast-Forward
may 1999 to may 2000 was China’s meteoric Climb
a stock-market roller-coaster 2000: No billionaires hail from
ride, as tech shares surged and mainland china. (the country’s
then plummeted. the fortune of first billionaire, banker Larry Yung,
Japanese billionaire masayoshi debuted on our 1997 billionaires
son (below) rose 12-fold to $68.5 list and then quickly dropped off.)
billion from may 1999 to the 2018: after averaging almost
following February, then dropped 10% annual gDP growth in the For 1999, Warren buffett gave
to $21.8 billion three months later. years since, china now has 373 himself a “D” for berkshire
bill gates’ wealth spiked from billionaires, including the world’s hathaway’s results. its portfolio
$61.3 billion to $92.5 billion, then 17th-richest person, tencent ceo had performed terribly,
back to $51.4 billion, over the Pony ma (below). taking berkshire shares down
same period. amaziNg ad in lockstep and wiping $8
The Digital Tool billion from buffett’s fortune. L to R: Yamaguchi haRuYoshi/coRbis/gettY images; tPg/gettY images; Dave WeaveR/aP
La plus ça change. . . . berkshire owned stalwarts
like coca-cola and american
express, studiously avoiding
the companies caught up in
the end of the initial dot-com
era. the oracle looked wiser
than ever when the bubble
burst: berkshire hathaway by AbrAm brown
gained 29% in 2000 while the
Nasdaq lost 39%.

1
0
34 | FORBES maRch 31, 2018 8

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The Wo rl d ’s b i l li o na ir e s







The American Dream is alive
and well on Wall Street thanks
to Robert Smith, the richest
black person in America, who
has figured out a way to re-
engineer both private equity
and enterprise software—and
used this secret playbook to
build $4.4 billion fortune.

By naThan VaRdi














Vista Equity
billionaires Brian
Sheth and Robert
Smith: Their LBO-
software mashup
and its eye-
Tim Pannell for forbes
popping returns
are changing the
game.

















How to Beat






Silicon Valley







36 | FORBES MARCH 31, 2018

Wall Street and






SimultaneouSly







MARCH 31, 2018 FORBES | 37

In nature, the falcon is a fierce fighter. In business, the Falcon 8X is just as powerful and agile. Every inch reflects its military DNA, with lean and mean
aerodynamics and advanced Digital Flight Controls to get you to places others can’t. Nothing flies like a Falcon because no other jet is built like one.
Fierce. Fast. Agile. Falcon 8X.



Th e World’ s billio na ir e s

S
RoBeRt mitH ment software company PowerSchool, who have been sum-


moned to Miami Beach, waiting to swap insights about artifi-
cial intelligence and other pressing topics. And Smith deploys
more than 100 full-time consultants to improve his companies.
“Nobody ever taught these guys the blocking and tackling

of running a software company,” says Smith, an engineer by
training, as he takes a lunch break at South Beach’s 1 Hotel to
nibble on a plant-based burger. “And we do it better than any
other institution on the planet.”
Smith includes the likes of Oracle and Microsoft in that

boast, and his numbers back up the braggadocio. Since the
Austin-based firm’s inception in 2000, Vista’s private equity

funds have returned 22% net of fees annually to limited part-
ners, according to PitchBook
data. Smith’s annual realized
“Nobody returns, which reflect exits,

ever taught stand at a staggering 31% net.
these guys His funds have already made
distributions of $14 billion,
the blocking including $4 billion in the last
and tackling year alone.
of running Not surprisingly given
a software those numbers, Vista has be-
come America’s fastest-grow-
company.” ing private equity firm, man-

aging $31 billion across a
range of buyout, credit and
hedge funds. Smith is putting

t’s a Saturday afternoon, at the all that money to work at a breakneck pace, with 204 software

I
height of vacation season, in one acquisitions since 2010, more than any tech company or fi-




of South Beach’s hottest hotels, nancial firm in the world. After finishing an $11 billion fund-

and Robert Smith, the found- raising for its latest flagship buyout fund last year, Smith has
er of Vista Equity Partners, is already deployed more than half of it, focusing as usual on

dressed like exactly no one with- business-to-business software. “They recognize it’s a kind of

in a 100-mile radius of Miami: central nervous system,” says Michael Milken, whose bond-
in a three-piece suit. His signa- market innovations basically birthed the modern private equi-
ture outfit—today, it’s gray plaid, ty industry and who has been a co-investor in two Vista deals.

accented by an indigo tie and a Taken together, Vista’s portfolio, with 55,000 employees and
pink paisley pocket square—ap- more than $15 billion in revenue, ranks as the fourth-largest
parently doesn’t take a day off, enterprise software company in the world.


and Smith isn’t taking one now Smith deploys quickly for a simple reason: While the rest
either. He’s gathered dozens of of private equity basically relies on identifying and rectify-
CEOs from his portfolio com- ing inefficient companies, Vista bets that it can improve the





panies, software firms all, for a operations of even well-run firms—and claims that it’s never
semiannual weekend off-site to lost money on a buyout transaction in its 18-year history. “I

drill them in the ways he expects am most proud of our system being a loss-prevention mecha-
his companies to operate. nism,” Smith says.
It’s not just the suit that’s un- Perpetual wins translate into mammoth personal gains.
usual. Private equity firms almost never treat their portfolio With an estimated net worth of $4.4 billion, Smith has now

companies, transactional chits by design, like an organic co- eclipsed Oprah Winfrey as the nation’s wealthiest black per-
hort. And until recently, PE, a field built on borrowing against son. Vista has created another billionaire, Brian Sheth, the



cash-generating assets, wouldn’t touch software firms, which firm’s 42-year-old president and dealmaker extraordinaire,


offer little that’s tangible to collateralize. Yet Smith has invested who has a fortune estimated at $2 billion.

only in software over Vista’s 18-year history, as evidenced by Ever since Forbes outed Smith as a billionaire in 2015, there

the CEOs, like Andre Durand of the security-software maker has been a steady stream of press about him, from the low-
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TH E WORLDÕ S BILLIO NA IR E S

S
ROBERT MITH
playmate) to the highest (coverage of his philanthropy, includ-
ing his Giving Pledge commitment and his stint as the chair-
man of Car ne gie Hall).
But neither Smith nor Sheth has ever before delved into
Vista’s secret formula, which has as many or more lessons for
entrepreneurs and operators as it does for financiers. “We do

something no one else does,” Smith says.

ON PAPER, ROBERT SMITH’S JOURNEY was a textbook Ameri-
can success story: A fourth-generation Coloradan, he was the
son of two Ph.D.’s who became Denver school principals and


put education first at home. “Their father and I stressed the
need for both of our sons to persevere once they identified and

pursued a goal,” say Smith’s mother, Sylvia. “Robert under-
stood that preparation, hard work and dedication were key to
success in his classes.” In 1981 Smith headed to Cornell Uni-
versity to study chemical engineering, spending many nights
and weekends in a three-person study group that met in the
basement of the engineering school’s Olin Hall. During sum-
mers, Smith worked at Bell Labs back home in Denver—a col-

lege internship he landed as a high school student after persis-
tent cold-calling.
After graduating from Cornell in 1985, Smith took engi- John Utendahl, Bank of America vice

chairman and pioneering African-American
neering jobs, first at a Goodyear Tire & Rubber chemical plant

Wall Streeter, saw Smith’s spark early.

outside Buffalo, New York, and later at Air Products & Chem-
icals in Allentown, Pennsylvania. In 1990 Smith moved to

Kraft General Foods, where he focused on coffee-machine work harder,” he says. “And that’s what we did.”


technology. His efforts won him two patents: one for a stain- From his college days, when he joined the nation’s preem-
less-steel filter and another for a brewing process that makes inent black fraternity, Alpha Phi Alpha, known for its book-

crema, the layer of foam on top of espresso. In 1992 Smith en- ish but professionally ambitious members like Thurgood

tered Columbia Business School. He was deftly acquiring the Marshall and Martin Luther King Jr., Smith had support. A

kinds of skills that would prove invaluable as the tech revolu- crucial mentor: John Utendahl, who founded a pioneering
tion exploded. black-run investment bank and happened to speak at Smith’s

But Smith’s rise was also Columbia graduation. Soon after, Utendahl, currently a vice
incredibly abnormal. Even Smith’s rise chairman at Bank of America, took Smith to lunch and over
today, as the 155th-richest was also tuna sandwiches persuaded him to ditch his M.B.A. focus of
person in America and the marketing to work on Wall Street. “There is a spark, a poise,

480th in the world, he faces incredibly even a wisdom that you can’t teach or learn. Some people are

constant, if often unwitting, abnormal. just blessed to have it,” Utendahl says. “That’s how I felt when

racism. At a recent dinner in Even today, I met Robert as a young man.”
New York City with a group as the 155th-
of senior Wall Street types, in- SMITH LANDED IN GOLDMAN SACHS’ mergers-and-acquisi-
cluding a high-level execu- richest tions department, eventually moving to San Francisco to ad-

tive of an investment bank, person in vise companies like Microsoft and eBay and becoming cohead
Smith moved to pick up the America, of enterprise systems and storage. He was part of the team that
check for dinner, but the se- helped Apple recruit Steve Jobs back.
nior banker stopped him. “I he faces For all his prominent clients, it was a little-known Houston

can’t have a black guy buy me constant, company specializing in software for auto dealerships, Uni-
dinner,” he chortled. if often versal Computer Systems, that caught Smith’s eye. Its margins

The sting of such inci- were higher than any business Smith had advised, and he was
dents, whether offhand re- unwitting, stunned to learn the company’s owners were plowing its cash GENE YOUNG/SPLASH NEWS/ALAMY



marks or doors more overt- racism. into certificates of deposits. Why not acquire other mature

ly shut to him, had an effect software companies, Smith asked, and apply their best busi-

on Smith. “It meant we had to ness practices there too? Great advice, but the owners insist-
42 | FORBES MARCH 31, 2018

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Th e World’ s billio na ir e s

S
RoBeRt mitH Ventyx, increasing the number of products it sold to existing
customers substantially—a subsequent sale to ABB resulted in
ed that Smith roll up his sleeves and execute the plan for them. a profit of nearly $1 billion.




They backed up their offer with a commitment of $1 billion When the dust settled, Smith’s first buyout fund returned
of the company’s cash, as the sole investor, if he started a pri- 29.2% annually net of fees. Smith raised money for a sec-
vate equity fund. “I had one of those in-the-mirror moments,” ond fund from institutional investors, returning a net 27.7%
Smith says. “I looked at myself and asked, ‘If I don’t do this, annually. In 2011, seeking to escape the Silicon Valley bub-
how will I feel about it ten years from now?’ ” ble, Smith moved Vista’s headquarters to Austin, Texas. He

The short answer: regretful. And so in 1999 Smith left Gold- could, by this point in his career, do pretty much anything he

man and soon began recruiting cofounders, notably a busi- pleased.
ness-school classmate, Stephen Davis, and a young analyst who “I still experience racism in my professional life,” Smith
worked under him at Goldman, Brian Sheth. The son of an In- says. But by being smarter and working harder, Smith proved


dian-immigrant father with experience in tech marketing and the American Dream extended to the finance industry, where
an Irish-Catholic mother who worked as a reinsurance analyst,
Sheth would provide the yang to Smith’s yin, focusing on ac-
quisitions and divestitures, so that his boss could concentrate

on investors and the companies themselves. Their relationship a neW PatH to PlayBooK PRoFitS
would become ironclad: “When something is happening with
There was a time when buyout firms like KKR and Apollo could be

our families we are each other’s first call,” says Sheth, who vaca-

tions with Smith and served as best man at his wedding. successful simply by piling debt on a company, cutting costs and then
letting the magic of leverage and compounding do its work. But what
When Smith quit, most of his colleagues thought he’d lost
his mind. He was on a partnership track at Goldman, which worked in the past may no longer be viable. There is now more than
meant he was set to receive a multimillion-dollar wind- $1 trillion of private equity cash chasing deals and bidding up prices.



fall given the firm’s impending initial public offering. What’s According to DealLogic, private equity firms did $58 billion of tech

more, banks didn’t lend against software companies because transactions in 2016, a third of all U.S. deals.
they didn’t have hard assets. How could Smith run a lever- Even Vista has had to pivot from buying legacy software compa-
aged-buyout business in nies to acquiring higher-growth operations, often at big prices and

software without lever- valuations.

age? The concentration “Software Vista’s acquisition of Marketo, a marketing automation software
risk also seemed huge— contracts are leader based in San Mateo, California, is a good example. After in-
investing in a single in- better than vestors became disenchanted with its less than stellar 30% to 40%
dustry where a few inno- revenue growth rate, Marketo’s share price plummeted by some 50%

vative lines of code from first-lien debt.” in early 2016. Then in May 2016, Vista swooped in to buy the compa-
a competitor could make ny, putting up $1.3 billion in cash in a $1.8 billion deal. It was a gen-
a business obsolete over- erous 64% premium, but Vista knew that before long an operation-
night. al overhaul, coupled with the small amount of debt it added to its

But Smith saw things differently. Software was eating the balance sheet, would turn the cloud-based marketing software com-


world. Soon every company would become a software com-

pany into a winner. Recently, Marketo’s cash flow (Ebitda) has turned
pany, its business digitized. A portfolio of software compa- positive. ÑN.V.


nies serving 50 industries would be diversified with a stream

of recurring revenue, given the shift to “software as a service.”

Smith’s bet: Wall Street would soon realize that software com- ThE STOCK ThE dEaL

50 PEaKEd in CLOSES On
panies not only gushed cash but actually had terrific assets to FEBRUaRy taRGet: maRKeto aUGUST 16,

a
t
a
e
K
R
R
:

m
G
e
t
o
t
2014 aT
2016, SO
lend against—those ironclad maintenance contracts. $45.00. STOCK STOPS
TRadinG.

“Software contracts are better than first-lien debt,” Smith

40 in MaRCh 2016, ViSTa
says. “You realize a company will not pay the interest payment STRiKES a dEaL TO
BUy MaRKETO FOR



on their first lien until after they pay their software mainte- $35.25 PER ShaRE.
nance or subscription fee. We get paid our money first. Who

30
has the better credit? He can’t run his business without our
soft ware.” EBiTda
TURnS
iT hiT an aLL-TiME
In 2000 Smith opened Vista’s doors in San Francisco. His LOW OF $12.86 in POSiTiVE
aT ThE
FEBRUaRy 2016.
first acquisitions were all equity. As the firm went from one 20 EBiTda iS aT -$50 MiLLiOn in STaRT OF


2018.
12 MOnThS PRiOR TO dEaL.

profitable deal to another, Smith eventually got lenders to fi-

nance Vista’s purchase of Applied Systems, an insurance soft-

2 0 1 4 2 0 1 5 2 0 1 6

ware maker, in 2004, Vista’s first leveraged buyout. In 2007 10

Vista merged software companies serving utilities and created
44 | FORBES MARCH 31, 2018

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Th e World’ s billio na ir e s

S
RoBeRt mitH To implement his playbook, Smith created an in-house
McKinsey: Vista Consulting Group. These employees, now

he became the first self-made Wall Street billionaire who 100 strong, help portfolio companies implement the best

wasn’t a white male. prac tices, also 100 strong, most of which run three to ten
pages, with reams of attachments and examples. Printed out,


WHEN VISTA SELLS a company, Smith reverts to engineer mode, they fill binders. They are stored in a password-protected
often giving its CEO an expensive Swiss or German watch. “It online library, available only to authorized portfolio compa-

is not about being generous,” Smith says. “It is a function of the ny managers.

process and focusing on the detail of finding the person who is “I just had an employee get a promotion,” says Kristin
going to be the best at making that Nimsger, CEO of Social Solutions,
one gear.” a cloud company providing data-
To Smith the watch represents To implement his management software for nonprof-

that “we created a system.” And it’s playbook, Smith created its like the United Way of Metro
that system that has allowed Vista an in-house McKinsey— Chicago. “He was super-excited to
to gobble up enterprise software Vista Consulting Group—to get a log-in.”


companies, confident that it can al- The playbook includes exhaus-

most always make them better. help portfolio companies tive details on things like contract
When Smith started shopping for learn best practices. administration and steps need-
software companies, he found that ed to ensure a company is being

many were run by former program- paid for all the code or services
mers and other technologists who its customers use. In one case, a
were not formally trained in business and grew rapidly by sheer company Vista bought charged customers only for inbound
strength of product launches, with little analysis of whether support calls, neglecting to charge a minimum amount for
they made sense. ongoing support. Vista canceled all the contracts and got
Drawing on his background as an engineer and a Gold- 100% of the customers to enter into new deals with higher
man vet, Smith began writing what amounted to user manu- minimum support payments.
als for running enterprise software companies. The manuals Another set of playbook commandments revolve around


weren’t just about efficiency but also incorporated cost-cut- sales, including incentives for salespeople cross-selling and


ting measures and fee-generating ideas. Eventually, Smith’s upselling additional products. In one case, a portfolio com-
playbook became the Vista Standard Operating Proce- pany was rewarding salespeople the same way whether they

dures—VSOPs. These were later renamed a more generic and brought in one-year contracts or longer-term ones.
user-friendly Vista Best Practices. In isolation, many of the playbook’s best practices seem
“If you are a software executive, how do you build your mundane. But software companies are often rife with ec-



commission structures or run your go-to-market strategy? centricities and legacy processes endemic to startup culture.
How do you find and train talent? Who teaches you those Things like weekly deal-pipeline meetings, commonplace at


things?” Smith asks. B-school-driven corporations like IBM and Procter & Gamble,
mR. mitH’S SoFtWaRe mPiRe
S
e
moVe oVer larrY ellison. VisTa oWns 48 enTerPrise sofTWare ComPanies serViCinG 20
inDUsTries ranGinG from enerGY To laW To HiGHer eDUCaTion anD liVe eVenTs.





Finastra makes
Tibco Software,
Tibco Software, Solera Holdings Cvent, which Finastra makes PowerSchool Marketo is a giant Ping Identity
Ping Identity
Marketo is a giant
Cvent, which
PowerSchool
Solera Holdings
which makes makes software makes software risk management makes education- in cloud-based makes identity-
software for banks
business-intelli- for auto and home for managing and software for banks management marketing auto- security software
for auto and home
gence software, insurers and was planning corporate and financial software. It was mation software. It and was pur-
mation software. It

planning corporate

was purchased by purchased by events, was pur- firms. It was cre- purchased in 2015 was purchased by chased by Vista
Vista in 2014 for Vista in 2015 in a chased by Vista ated by Vista in for $350 million. Vista in 2016 for for $600 million in
for $600 million in
$4.3 billion. $6.5 billion deal. in 2016 in a $1.7 2017 through the It’s spent another $1.8 billion. 2016.
billion deal. merger of D+H $1 billion on add-
and Misys. on acquisitions.
48 | FORBES MARCH 31, 2018