Entrepreneurs suffering the most pain

Reckon your share portfolio has had a poor start to the year? You’re not alone. Australia’s 30 biggest sharemarket investors – a list that includes giants such as James Packer, Andrew Forrest, Frank Lowy and Gerry Harvey – have seen more than $2.8 billion wiped off their share portfolios since the start of 2008.

And with US markets falling a further 2% on Friday night trade, the pain is clearly not over.

The biggest loser is James Packer. His portfolio, made up of large stakes in Crown, Consolidated Media, Challenger Financial Services, Sunland and Energy World Corporation and smaller stakes in Wildhorse Energy and Magellan Flagship Fund, has lost $564.4 million since the start of the year.

The value of Packer’s stake in Crown has dropped more than 11%, or $405.3 million, as doubts grow about the state of the Macau casino market. Shares in Challenger also dropped more than 11%, shaving $69.5 million off Packer’s stake, which is now worth $539.2 million.

Frank Lowy’s Westfield Group has been hit by the fallout from the Centro-inspired sell-off of the property sector. Westfield’s shares have fallen 11.7% since the start of 2008, wiping $440 million off his stake, which is now worth $3.3 billion. Merrill Lynch upgraded Westfield to a “buy”, arguing the stock has been sold off unfairly, but the pressure on the property sector is likely to continue until Centro’s uncertain future becomes clearer.

Fortescue Metals boss Andrew Forrest, who is probably still just shading Packer in the tussle for the title of Australia’s richest man (daily fluctuations in the value of their share portfolios and Packer’s extensive private holdings make it difficult make a definitive judgement), has also had a rough two weeks. His stake in Fortescue is worth $6.6 billion, down $312 million since the start of the year.

Not that Forrest would be too worried – he’s seen big rises and falls in the value of his Fortescue stake recently. Indeed, his stake was worth an incredible $8.54 billion on December 28, when the company’s share price jumped more than 15% in one day.

Other big losers include Harvey Norman’s executive chairman Gerry Harvey (the value of his stake is down $221.2 million since the start of the year to $1.9 billion); WorleyParson’s boss John Grill (whose stake has dropped $219.4 million to $1.4 billion); Len Ainsworth (whose stake in pokie maker Aristocrat has lost $139.3 million and is now worth $1.4 billion); and Transpacific Industries founder Terry Peabody (whose stake has lost $95.9 million, pushing its value just below $1 billion).

While it must be stressed that these are only paper losses, the fact these wealthy investors have lost such large amounts in such a short period of time gives all investors something to think about.

For the past five years, surging equity markets have propelled many of Australia’s richest entrepreneurs – including Peabody, Grill and Forrest – into the billionaires’ club. Holding on to those paper profits might be about to get much harder.