EMERGING MARKETS: JOINING THE GLOBAL RANKS OF...

EMERGING MARKETS: JOINING THE GLOBAL RANKS OF WEALTH CREATORS

IN ASSOCIATION WITH:

AFRICA , CENTRAL & EASTERN EUROPE, MIDDLE EAST

CONTENTS■ Executive Summary.......................................................................................................2

■ Key Findings....................................................................................................................3

■ Introduction.....................................................................................................................4

■ Openness and Social Attitudes ............................................................................5

■ Openness and Social Attitudes: Central and Eastern Europe .................6

■ Openness and Social Attitudes: Africa .............................................................9

■ Openness and Social Attitudes: The Middle East ......................................12

■ Global Citizens ..........................................................................................................14

■ Building a Global Company .................................................................................16

■ Display of Wealth .....................................................................................................20

■ Spending: Investments and Pursuits ...............................................................24

■ Methodology ..............................................................................................................27

■ Appendix: Statistical Information on Ultra High Net Worth Individuals in Central and Eastern Europe, Africa and the Middle East ............................28

EMERGING MARKETS: JOINING THE GLOBAL RANKS

OF WEALTH CREATORS

CONTENTS

2 | EMERGING MARKETS

EX

EC

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SU

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Y Emerging Markets: Joining the Global Ranks of

Wealth Creators—Africa, Central

& Eastern Europe, Middle East

analyzes 250 fortunes in these

up-and-coming regions. The

report is also based on inter-

views with billionaires from

these emerging markets, as well

as editors of Forbes local lan-

guage editions, and Forbes and

Forbes.com wealth analysts.

Emerging-market fortunes

differ from those in mature mar-

kets in terms of the openness of

ultra high net worth individuals

(UHNWIs) about their holdings

and fortunes, as well as their

countrymen’s attitudes toward

gathering wealth. Although

entrepreneurs from emerging

markets have made impres-

sive strides in building global

companies, they are still at a dis-

advantage in terms of creating

global brands. Because their for-

tunes are mostly first generation,

the personal money manage-

ment practices in the emerging

markets are also at an earlier

stage than in mature markets.

Forbes Insights and Societe Generale Private Banking would like to extend their thanks to thebillionaire andmultimillionairebusinesspeople who shared their time and expertise with us:

■ Sudhir Ruparelia,

Doctor of Business

Administration,

Chairman, Ruparelia

Group, UGANDA

■ Jan Kulczyk, Ph.D.,

Founder and Chairman,

Kulczyk Investments,

POLAND

■ Victor Pinchuk,

Founder of international

investment advisory

company EastOne Group

Ltd., UKRAINE

■ Stephen Saad,

Co-founder and Chief

Executive Officer, Aspen

Group, SOUTH AFRICA

KE

Y F

IND

ING

S ◆ Businesspeople in the emerg-

ing markets of Africa, Central

and Eastern Europe and the

Middle East have joined the

ranks of global billionaires. Some

of the individual fortunes that have been cre-

ated there, in some cases in just over two

decades, can be breathtaking. However, they

are not yet up to the levels of mature markets,

such as the United States and Western Europe.

◆ The openness of the wealthy

about their fortunes correlates

directly with the attitudes of

their countrymen toward them,

and both of these are lower for emerg-

ing markets studied for this report than in

mature markets. The more open the wealthy

are about their fortunes, the more their coun-

trymen accept them.

◆ Attitudes toward wealth and

wealth creation vary greatly

among individual nations. For

instance, although the system change in

Central and Eastern Europe happened

roughly at the same time, the diff erences

in speed with which particular countries

embraced free markets, as well as their own

national histories, resulted in varied attitudes.

In some countries it is still an uphill battle for

entrepreneurs to convince their countrymen

that wealth creation is a positive phenomenon.

◆ The majority (78%) of emerg-

ing-market fortunes studied for

this report are fi rst-generation,

with Russia being 100% fi rst-

generation. The emerging markets’

billionaires speak a common, global lan-

guage of business, but they often see their

participation in global business as a way to

circle back to their homelands and communi-

ties, with which they strongly identify.

◆ Building a top global business

is tougher than joining the ranks

of global billionaires. While a major-

ity of businesses studied for this report are

international, just 6% of the world’s 2,000

largest public companies are owned or co-

owned by billionaires from Central and

Eastern Europe, Africa or the Middle East.

However, billionaires from these regions

account for 14% of the world’s billionaires.

◆ The wealthy from emerging

markets are slightly more under-

stated than those from mature

markets. However, there are vast dif-

ferences among emerging countries and

regions with regard to wealth display, with

the Middle East and Russia having the high-

est levels of display, and Central Europe and

Africa the lowest.

◆ Sports, philanthropy and poli-

tics are among the top pursuits

of billionaires from emerging

markets studied for this report.

While some of these pursuits are investments,

and some are philanthropic, the billionaires

are often trailblazers in how they approach

these areas.

◆ Technology is seen as the

industry that will vault emerg-

ing markets ahead, transforming them

into high-value-added producers who do not

need to rely on inexpensive labor or natural

resources for growth.

COPYRIGHT © 2013 FORBES INSIGHTS | 3


INT

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he world is currently going

through twin gilded ages,

points out Chrystia Freeland

in her book Plutocrats, The

Rise of the New Global Super-

Rich and the Fall of Everyone Else.

For the Western, mature markets, this is

the second time a gilded age is taking place.

The fi rst gilded age happened during the late

Industrial Revolution, in the 19th century. It

is known as the Gilded Age due to the huge

fortunes amassed at the time.

Today many of the countries in emerging

markets are industrializing or have replaced

their planned communist or socialist econo-

mies with free, or freer, markets, making the

current twin gilded ages a political phenom-

enon in regions such as Central and Eastern

Europe as well as Africa. In mature mar-

kets much of the engine of the current gilded

age comes from the burst in technological

advancement, which serves as a global eco-

nomic accelerant for all markets.

In his book The Next Convergence: The

Future of Economic Growth in a Multispeed

World, Michael Spence, winner of the Nobel

Prize in economic sciences, points to the

historic proportions of this convergence in

wealth creation. Back in 1950, 750 mil-

lion people lived in industrializing countries

and the remaining 4 billion-plus were left

behind, Spence writes.

“Today we are at a midpoint in the pro-

cess of two parallel interacting revolutions: the

continuation of the Industrial Revolution in

the advanced countries, and the sudden and

dramatic spreading pattern of growth in the

developing world,” writes Spence. “The end

point is likely to be a world in which perhaps

75 percent or more of the world’s people live

in advanced countries with all that it entails.”

This report analyzes this fi rst wave of

wealth creation in several of the world’s

emerging markets—Central and Eastern

Europe, Africa and the Middle East.

Businesspeople in these regions have

joined the ranks of global billionaires. In fact,

some of the individual fortunes that have

been created there, in some cases in just over

two decades, are breathtaking. They are not

yet up to the levels of the largest fortunes in

mature markets, such as the United States

and Western Europe, but they are catching

up fast considering the short timespan since

their inception.

Apart from the size of the fortunes, there

are ways in which going through a burst of

wealth creation for the fi rst time can be a

disadvantage, as emerging markets are still

building regulatory institutions, business

practices and political systems, which mature

markets have been strengthening over the last

century.

The wealth creators in emerging markets

are working at gaining acceptance by their

countrymen. They are competing around

the world to build global brands, investing

to enrich not just themselves but also their

countries, and following pursuits such as

sports and philanthropy. This report looks at

the challenges they face in joining the global

ranks of wealth creators and how they over-

come them, as well as the advantages they

have as entrepreneurs from regions where

they have had to be more resourceful in cre-

ating their businesses mostly from scratch,

and with fewer models to follow.

● United States: $24.3 billion

● Western Europe: $20.1 billion

● Russia: $10.1 billion

● Middle East: $7.6 billion

● Central & Eastern Europe: $3.2 billion

● Africa: $2.3 billion

● Turkey: $2.0 billion

S O U R C E : F O R B E S

AVERAGE SIZE OF FORTUNE OF THE 20 RICHEST INDIVIDUALS

“In our continent, a balance between commercial

success and an investment back into society is important in

shaping a positive attitude.” — S T E P H E N S A A D, C E O, A S P E N

G R O U P, S O U T H A F R I C A

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Openness about the origin

and size of fortunes is lower

in emerging markets than it

is for ultra high net worth

individuals (UHNWIs) in

mature markets. On a scale from 0 to 10, with

0 being not open at all and 10 being very trans-

parent, the Forbes Wealth Panel assigned the

emerging markets analyzed for this report a score

of 4.2, and mature markets a score of 7.3.

The openness of the wealthy about their

fortunes correlates directly with the attitudes of

their countrymen toward them. The more open

the wealthy are about their fortunes, the more

their countrymen accept them, and vice versa.

In terms of social attitudes towards great wealth,

the gap between the emerging and mature

b h i i

markets is just two points, with the Forbes

Wealth Panel scoring mature markets at 6.3, and

emerging markets at 4.1.

The reasons for less transparency start with

the origins of many of the emerging-market

fortunes—and the fact that many of them are

still so new that the origins are not forgotten,

mired in history or tempered by the subsequent

philanthropic benevolence of the founders.

Historically, fortunes tend to be built in waves,

brought about by industrial or political revolu-

tions, and their fi rst decades are usually messy.

Industrial revolutions unleash productivity via

new technology; political ones can do the same

thing by loosening the old elite’s grip on an

economy, thus creating fresh space for entrepre-

neurial activity.

The most successful businessmen who

built their fortunes during the Industrial

Revolution—such as J.P. Morgan or J. D.

Rockefeller—were during their careers referred

to as robber barons, for what their critics per-

ceived as amassing wealth in a way that robbed

the rest of society.

As time goes by and the emerging markets

develop, the biggest fortunes should become more

transparent, which should lead to improvement in

those societies’ perceptions of wealth creators.

Western societies may not be all positive

about their wealthy, even though they have had

the time to get used to the diff erences in income

levels. But in many emerging countries, espe-

cially in Eastern Europe, used to the seeming

equality of socialism, under which everybody

was more or less equally poor, the income gap

between the average population and the very

wealthy—which is currently exacerbated by

hard economic times—is coming as a shock.

Openness About WealthMature Markets vs. Emerging

Markets: 7.3 vs. 4.2

Attitudes Toward Wealth CreatorsMature Markets vs. Emerging

Markets: 6.3 vs. 4.1S O U R C E : F O R B E S I N S I G H T S W E A L T H P A N E L

R A N K E D O N A 0 - 1 0 S C A L E



In Central Europe and Russia, the trigger

for wealth creation was transitioning from

communism to free markets just two decades

ago. The overall score for openness that

Forbes wealth analysts give Central Europe is

3.9, and the social attitudes are at 3.8. There

are vast diff erences among the countries,

depending on how fast and how masterfully

they handled the transition to free markets

and democracy. Leading the way are coun-

tries such as Poland and the Czech Republic,

which get the highest scores, while south-

eastern Europe is still lagging.

Jan Kulczyk, international

businessman (net worth: $2.7

billion, according to Forbes),

explains his countrymen’s atti-

tude toward wealth creators in

Poland: “Poland is still working its way up,

with the mental heritage from the social-

ist era but also with great aspirations. Wealth

creators trigger mixed emotions, but I do

not think this phenomenon to be much dif-

ferent from the European average. In recent

years, the middle class has been developing

in Poland, successful people who also work

in other countries, for whom being rich is

not automatically equal with being suspi-

cious. More and more people realize that the

success of entrepreneurs does not only come

down to the matter of personal wealth but

that it also means new workplaces, taxes paid

to the state budget, economic growth, pri-

vate patronage. To everyone’s benefi t.”

Moreover, attitudes toward wealth in

Poland have improved since the early stages

of post-communist fortune creation, when

businesspeople were considered as suspect,

agrees Jacek Pochlopien, deputy editor of

Forbes Poland. “About fi ve to eight years

ago, I realized that something was changing,”

says Pochlopien. “Many Polish people started

to work independently, they became entre-

preneurs, so now the attitude of the general

population toward wealth started to change.”

The entrepreneurial bent of the Polish

people has been confi rmed by a Forbes

Insights/ACCA report titled “Nurturing

Europe’s Spirit of Enterprise.”

Based on a survey of 1,245 European

executives, the report found that Polish

respondents were most likely to say that they

had championed an innovation. They were

also more likely to say that they had succeeded

in getting the innovation implemented. UK,

German and Swiss executives were least likely

to say that they had proposed an innovation.

The entrepreneurship of the popula-

tion correlates with bigger acceptance for the

wealthy in Poland. Pochlopien now ranks

social attitudes toward the rich at 6, while

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Open ness About Wealth

In Central and Eastern Europe: 3.9

Attitudes Toward Wealth Creators

In Central and Eastern Europe: 3.8

S O U R C E : F O R B E S I N S I G H T S W E A L T H P A N E L



in 2000 he would have given them a 4: a

two-point rise in a decade.

Victor Pinchuk, a Ukrainian bil-

lionaire who—with a net worth of $4.2

billion—was ranked by Forbes as the 255th

richest person in the world in 2012, is well

aware of the tough transition to free mar-

kets that some of his countrymen faced

once communism collapsed. “Today in

Ukraine many people struggle to survive.

Older ones often see the breakdown of

the Soviet system as a loss of stability and

security for average people, and therefore a

certain hostility to quickly acquired wealth

is, from their point of view, quite under-

standable at the fi rst look,” he says.

However, Pinchuk

believes that “Ukrainian

business has played a

very constructive role

since Ukraine became

independent, regardless of mistakes that

have been made. It has worked hard to

create value for society, and it has also

increasingly contributed to solving social

problems. I hope we will manage to con-

vince ever more people,” he adds.

For that to happen “businessmen need

to understand the challenges of society and

contribute to solving them,” he says. He

tries to anticipate changes aff ecting soci-

ety, stay ahead of them and help address

them. As an example, Pinchuk gives the new

metallurgical plant his company opened in

Dnepropetrovsk in October 2012: it com-

bines cutting-edge production methods,

measures designed to save energy and pro-

tect the environment, investment in staff ,

as well as contemporary artworks and social

programs for the district where it is located.

Sums up Pinchuk: “Ukrainian business needs

to communicate better with the society in

which it is embedded.”

In some countries it is stil l an uphill

battle for entrepreneurs to convince their

countrymen that wealth creation is a posi-

tive phenomenon. Iordan Mateev, editor

of Forbes Bulgaria—who also notes the

murky beginnings of some Bulgarian

fortunes—points out that the negative

perception affects all wealthy individu-

als. “Even the honest businessmen are not

transparent, because the public hates rich

people and believes not one has gotten

rich honestly,” he says.

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“In Poland, more and more people realize that the success of entrepreneurs does not only come down to personal wealth,

but that it also means new workplaces, taxes paid to the

state, economic growth.” — J A N K U LC Z Y K , C H A I R M A N ,

K U LC Z Y K I N V E S T M E N T S , P O L A N D


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Although the system change

in Central and Eastern

Europe happened roughly

at the same time, the diff er-

ences in speed with which

particular countries embraced free mar-

kets, as well as their own national histories,

resulted in varied attitudes.

In Turkey, being ultra-wealthy was not

considered as compatible with being honest

for a long time—especially during the 1950s

to the 1980s, until Turgut Özal became

Turkish prime minister and then president

in the 1980s and early 1990s. Özal moved

Turkey toward a free-market system, which

enlivened the moribund economy and cre-

ated boom years for private enterprises. Only

after that did Turkey start to discuss entre-

preneurship, accumulation of wealth, growth

and the private sector as positive terms, says

Burcak Guven, editor of Forbes Turkey.

Russia, with 95 billionaires, now trails

only the United States and China, but

Russian people do not have an easy time

adjusting to the new wealth. That’s partly

because Russia had more communist baggage

than other countries. Maxim Kashulinsky,

former editor of Forbes Russia, notes, “In

other parts of Eastern Europe, when the

free market was restored in the beginning

of the ‘90s, there was a part of the popula-

tion who still remembered that their fathers

or grandfathers had owned businesses.”

Not in Russia, where private ownership of

“means of production” was non-existent for

70 years. “Some people fi nd it hard to accept

the idea that somebody can own a factory, a

bank or even a single store. Also, the massive

privatization of the 1990s is regarded by

many as unjust,” says Kashulinsky.

Attitudes toward the wealthy are further

harmed by the current recession in Europe. Just

as the wave of fortune-building is happening in

these regions for the fi rst time, these countries

are also experiencing for the fi rst time capital-

ist recessions, for which their populations are

not mentally prepared. Under communism, the

economic hardship seemed constant, but it was

even and predictable. Over the years, people

learned how to handle it and even make do.

But capitalist recessions are unexpected and

have come as a rude shock.

The recession in 2009 was

the fi rst capitalist crisis the

Bulgarians have seen, says

Mateev. “Before it, people

thought our growth after

entering the European Union in 2007 was

inevitable until we caught up with the oth-

ers. There is the social discontent due to

the rise of unemployment. Rich people are

hiding from the public more than ever.”

For instance, even though Forbes Bulgaria

publishes a list of the most infl uential

Bulgarians, including the country’s wealth-

iest citizens, Mateev has been unable to

meet the three richest men in the country

despite many attempts to interview them.

Overall, transparency is on the rise in

Central and Eastern Europe, with countries

like Poland and the Czech Republic lead-

ing the way. As a result, UHNWIs in these

countries are more forthcoming and assets

are easier to analyze, and their countrymen

are beginning to take pride in them.

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In the past labeled a “hopeless con-

tinent,” Africa is now referred to

as the next Asia and, according to

the World Bank, could be “on the

brink of an economic take-off ,

much like China was 30 years ago and India

20 years ago.”

Economic growth spurs growth in for-

tunes. At this stage, there are only 16

Africans on the 2012 Forbes world billion-

aires list of the 1,226 richest people. But

there are also so many up-and-coming for-

tunes that Forbes has started publishing a

list of the 40 richest Africans. In 2011, the

40 richest Africans were worth $64.9 bil-

lion, more than Thailand’s 40 richest but less

than Taiwan’s 40 richest people. In 2012 the

top 40 Africans were worth $72.9 billion,

an increase of 12%. The price of admission

to the 2012 Africa 40 richest list was a net

worth of $400 million.

The Forbes Wealth Panel gave Africa

relatively low scores for openness about for-

tunes, which correlates with the origins of

the fortunes and the continent’s political and

economic history. It is worth noting that

South Africa received some of the highest

scores on the continent, especially in terms of

transparency, and without it the total African

scores would be signifi cantly lower.

“ Ugandans generally are enter-prising people, and success is nor-

mally acceptable and accepted.” — S U D H I R R U PA R E L I A , C H A I R M A N ,

R U PA R E L I A G R O U P, U G A N DA



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and then opened them up for business.

Africa’s richest man, and the world’s

richest black man, Nigerian Aliko Dangote—

whose net worth is $12 billion, according

to Forbes—also can trace his business roots

back to pre-independence days. His father,

Mohammed Dangote, was a successful busi-

nessman and an associate of his maternal

grandfather, Alhaji Sanusi Dantata, accord-

ing to Forbes South Africa. Dantata and his

brother controlled the trade in kola nuts and

livestock conducted by some 200 agents.

Billionaire Dangote must have inherited

their business genes: he started quite early

himself. At the tender age of eight he used

to give packets of sweets he had made to the

house servants to sell for him.

2013

Some of the African fortunes,

especially in industries like

mining and natural resources,

were created during colo-

nial times and apartheid.

That’s not to say that even before the coun-

tries gained independence there was no black

entrepreneurship. In an article in Forbes Africa,

South Africa’s fi rst black billionaire, mining

magnate Patrice Motsepe, points to his father,

Augustine, who was in a general dealership

business, as an inspiration. Trained as a lawyer,

Motsepe reached higher than his father ever

could by getting involved in business early on

in the 1990s, when things were opening up. He

bought some marginal mines that were near the

end of their lives, struck deals with the unions


Openness About Wealth

In Africa: 3.8


In Africa: 4.1




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The perception of the links between

business and government in Africa also

shapes attitudes toward the wealthy. Sudhir

Ruparelia, who runs one of Uganda’s largest

privately owned conglomerates, the epony-

mous Ruparelia Group, has a net worth of

$900 million, making him the 18th-rich-

est African, according to Forbes. Ruparelia

believes that social attitudes toward the

wealthy are split. “There would defi nitely be

some well wishers and some resentments,” he

says. “Ugandans generally are very enterpris-

ing people and success is normally acceptable

and accepted.” It’s worth noting that—rem-

iniscent of the example of Poland—he ties

acceptance by the population to the level of

entrepreneurship.

Ruparelia also recognizes the level of

responsibility that comes with money and

keeps a down-to-earth attitude. “One

becomes a role model, and this has its own

social responsibilities,” he says.

There is no escaping economic disparities

in Africa. With a net worth of $975 million,

Stephen Saad, the cofounder of Aspen Group,

was Africa’s 17th-richest person, according to

Forbes. He is well aware of the large dispari-

ties between rich and poor on one hand and

the fast-growing middle class on the other

hand. “A successful [business] strategy means

embracing all sectors of the population rather

than targeting the affl uent only. I believe

wealth creators who selectively target this

segment only may get a mixed reception,” he

told Forbes Insights.

Saad is best known for his suc-

cess in securing voluntary

licenses from global giants like

Glaxo SmithKline to produce

antiretrovirals to fi ght HIV/

AIDS and for securing U.S. Food & Drug

Administration approval as an antiretroviral

producer under President George W. Bush’s

Emergency Plan for AIDS Relief. The costs

are less than 5% of the pricing in the U.S.,

making these lifesaving medications accessible

for many people in need.

Sums up Saad: “In our continent, a bal-

ance between commercial success and an

investment back into society is important in

shaping a positive attitude in society.”


In the Middle East the openness of

the wealthy about their fortunes is a

relatively low 3.3, while social atti-

tudes toward the wealthy are more

than a point higher, at 4.6. This

transparency score does not include Israel,

which is otherwise counted in other scores.

Thanks to its robust democracy and stock

market, the transparency scores awarded

Israel by Forbes wealth analysts are so high,

that had these been included in the regional

score, the Middle East transparency score

would have risen to 5.6.

Tatiana Serafi n, a wealth consultant who

has covered the Middle East for Forbes,

notes, “There is little need for transparency

[in the Middle East], as many deals are done

via insular networks. Public markets are not

very liquid. Post 9/11, many Middle Eastern

investors pulled their funds from U.S. and

European markets and invested the money

in the region, creating further distance and

insularity from broader global markets.”

In the Middle East business dealings

and the management of fortunes are often

tied to social and cultural issues, such as

reliance on and trust of family members.

This reliance on and trust of family was

confi rmed by the 2012 Forbes Insights

study sponsored by Societe Generale

Private Banking, “Global Wealth and

Family Ties,” which established that the

Middle East is among the regions with the

highest percentage of businesses run by

families (at 62%, just behind India, where

73% of the largest fortunes are family run).

Openness About Wealth

In the Middle East: 3.3


In the Middle East: 4.6


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The relatively high scores for

social acceptance in the Middle

East may be confounding con-

sidering the recent Arab Spring,

which was, to a large extent,

caused by the anger of the have-nots and the

lack of economic opportunities for the young.

An article in Zawya, a business intelligence and

news provider based in Dubai, UAE, analyz-

ing the Forbes billionaires list, pointed to the

relative handful of the very rich in the region—

for example, as compared with Russia and

China—and cited overall wealth inequality as

one of the reasons for the Arab Spring in several

Middle Eastern countries, whose governments

do not foster entrepreneurship.

When interviewed by Forbes.com,

Prince Alwaleed bin Talal—with a net

worth of $18 billion, the richest man in

Saudi Arabia—def ined what it means to

be a billionaire in the Middle East in reli-

gious terms, adding another, deeper layer to

the understanding of attitudes toward wealth

in the region: “Wealth creation in the Islamic

world is very important because Islam, really,

is a blend of capitalism and socialism. For

example, there’s a verse in the Qur’an that

says, ‘If you thank God, God shall give you

more.’ That’s pure capitalism, obviously. It

says you can earn more. Yet, on the other

hand, Islam has a compulsory tax.…[If you

don’t pay this tax in the Islamic world], that’s

more than a crime. It’s against faith. I take

this issue of wealth creation and paying our

Islamic zakat very religiously. It’s really very

much part of Islam. It says, ‘You can cre-

ate as much wealth as you want, but be sure

that you abide by the rules and regulations

of Islam that says you have to pay that every

year for the needy, the poor, etcetera.’”

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In her book Plutocrats, Chrystia

Freeland writes that the world’s

super-elite “are becoming a trans

global community of peers who

have more in common with one

another than with their countrymen back

home.” She adds that this new super-elite

consists, to a notable degree, of fi rst- and sec-

ond-generation wealth.

“We have defi nitely more in common

than not,” Poland’s Kulczyk says, “irrespective

of the object of our activity, business strategies

or latitude. There is no doubt that very active

businessmen work not because they have to

but rather because they want to.”

In the emerging markets analyzed for

this report, the biggest fortunes are indeed

mostly fi rst-generation. This group is led by

Russia, where 100% of the biggest fortunes

have been made by their current owners, in

the aftermath of the fall of communism (see

chart).

But while Russians have the highest

percentage of self-made billionaires, Heidi

Brown, a Russia expert, believes that some

of the Russian entrepreneurs have been held

back by their continued identifi cation with

being Russian—in other words, some of

them may have too little in common with

the trans global community described by

Freeland. “They need to realize that their

wealth makes them part of a global econ-

omy,” says Brown. “Some of the most

successful billionaires have realized that,

while Russia may have given them their

wealth, they can use the wealth as a spring-

board to experience what lies beyond their

homeland.”

The billionaire entrepreneurs Forbes

Insights spoke with for this report drew

distinctions between the business mindsets

specifi c to their countries or regions versus

how they think when operating globally.

“I am a Polish businessman who carries

out investments globally. I think globally

and act globally,” says Kulczyk. “Poland

has always been and will be important to

me, but today investing requires not only

portfolio diversifi cation but geographical

diversifi cation as well.”

There are defi nitely national

or regional characteristics in

doing business. South Africa’s

Saad sees the African busi-

ness mindset as being “less

prescriptive and built more on reaching con-

sensus. Legal challenges tend to be resorted

to only once all other avenues are exhausted.

In trying to reach consensus, it can be frus-

trating and construed as procrastinating and

indecisive. However, it is generally a positive

and respectful environment.”

“There is defi nitely an African mindset/

business culture,” says Uganda’s Ruparelia.

“People need African exposure to succeed

in Africa.”

Nigeria’s Dangote believes that Nigerians

have a penchant for risk taking, which makes

them natural born entrepreneurs. He told

Forbes Africa that “…a Nigerian, by nature,

does not work for anybody. A Nigerian

will always try to do his best and work for

himself.”

Kulczyk describes the Polish busi-

ness mindset in the following way: “In my

opinion, entrepreneurship and willingness to

EMERGING MARKETS IN CENTRAL AND EASTERNEUROPE, MIDDLE EAST AND AFRICA

First-generation fortunes from emerging markets

Africa74%

Middle East54%

Central and Eastern Europe84%

Russia100%

Total For All Three Regions78%

EM ERGING MARK E TS


work hard are the qualities that distinguish

Polish people. We are one of the hardest-

working nations in Europe.

“Poles were forced to function in cri-

sis for many years, were challenged with the

scarcity of means and resources as well as

unstable conditions. We may jokingly say

that the ability to fi ght crises runs in our

blood.”

When asked whether he thinks of himself

as a global or a Ukrainian businessman, bil-

lionaire Pinchuk explains: “My business is a

globally oriented business based in Ukraine.

This is my country, my society, and we do

not for a moment forget where we are from.

And in all my professional and social projects,

I always follow the goal of strengthening my

country.”

South Africa’s Saad draws a distinction

between business and personal perceptions

as well. In business, he speaks the global

language. “Our industry peer group in phar-

maceuticals is global,” he says, “and local

players tend to be almost exclusively local. So

there is more commonality when discussing

global issues with global peers.”

But his inspiration comes

from South Africa. “I have

been blessed to have so

many role models within

South Africa who have

achieved greatness despite huge socio-

economic challenges. Their leadership,

determination and example, although not

industry specifi c, helps defi ne the persever-

ance required to be successful, both locally

and globally.”

“Every person is an individual with their

own personality and business acumen,” says

Ruparelia. “I am in touch with my country-

men.” Born in Uganda, Ruparelia moved

to the United Kingdom with his parents

at age 16 after President Idi Amin expelled

all Asians from the East African country in

1972, but he came back in 1985. “I think of

myself as a Ugandan Asian,” he stresses.

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“We need to understand that competition for resources

and clients is not with competitors from across

the street or from another city, but with millions

of businesses around the world.”— V I C TO R P I N C H U K , F O U N D E R ,

E A S TO N E , U K R A I N E

MARK E TS

So while Freeland may be right that in

terms of business the world’s billionaires

speak a common language, they often see

their participation in global business as a way

to circle back to their homelands and com-

munities, with which they strongly identify.


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xpanding their companies globally—either being able

to compete on a global scale or creating global brand

names—is what gains businessmen from emerging markets

the most admiration by the Forbes Wealth Panel. It is a tall

order. “They are very clever, innovative entrepreneurs,”

says Forbes Poland’s Pochlopien. “Sometimes they are not able to compete

with global players, because they founded their companies no more than

20 to 25 years ago and need some experience.”

Jan Kulczyk is one of the businessmen who has successfully created a

global business empire, which operates in 22 countries on four continents.

In 2007, he created Kulczyk Investments, an international investment

house with an international team and management board. The fi rm made

its fi rst investments in oil and gas and other minerals, and it has opened

offi ces in London, Kiev, Warsaw and Dubai. The company is the most

active Polish investor in Africa, which Kulczyk sees as the world’s most

abounding region as

far as mineral resources

are concerned.

“Coming from an

emerging market is

defi nitely a disadvan-

tage,” says Uganda’s

Ruparelia, citing lack

of access to capital,

slow Internet con-

nections, inadequate

infrastructure and the

speed at which the

government moves in

its service delivery as

challenges.

But Kulczyk

points to the advan-

tages of coming from

Central Europe: “This

experience is invalu-

able. In Central and

Eastern Europe, we have created a very effi cient and confl ict-free

transformation model that would allow a thorough, fast and effi -

cient transition from a state-owned economy to a free market. Let me

remind you that I come from a country that has been in permanent

crisis for over 50 years. After 1989, we underwent a crash course in the

free market economy. We had to be adventurous and bold in order to

take the future in our hands. Of course, we also made mistakes, but we

knew how to learn from them, and that is why the whole process resulted

in a great success. I have learned from this how to be fl exible in react-

ing to changes. It has also taught me perseverance and the ability to create

long-lasting relationships with prestigious partners, as well as how to see

and use opportunities. [This experience] is invaluable capital, which defi -

nitely helps me fi nd my way in other markets, especially in developing

countries, for instance, African ones.”

Even though many of these emerging-market businesses were started

Africa72%

Middle East61%

Central and Eastern Europe74%

How many billionaires from emerging marketsown companies that operate internationally?

EMERGING MARKETS IN CENTRAL ANDEASTERN EUROPE, MIDDLE EAST AND AFRICA

Total For All Three Regions71%

2013EM ERGING MARK E TS


only two decades ago, and despite the chal-

lenges they face, a majority of them can be

classifi ed as international, meaning that they

operate outside their own and adjacent coun-

tries (chart, page 16).

Joining the ranks of the world’s rich-

est people on a local or regional basis seems

easier than creating or co-owning a top

global company. Individual billionaires

from the emerging markets studied for this

report account for 14% of the world’s billion-

aires, but these individuals own or co-own

just 6% of the world’s 2,000 largest public

corporations.

No wonder then that global reach is a holy

grail, gaining respect and admiration. The

proof of just how diffi cult it is to create a global

brand is the Forbes list of the 100 most valuable

brands. Topped by Apple, a brand estimated

by Forbes to be worth $87 billion, and ending

with Kleenex, which clocks in at $3 billion, the

list includes no brands from any of the emerg-

ing markets analyzed for this report.

Creating a new brand, technology or

design depends on the level of innova-

tion in a given country or region, which in

turn requires openness of the economy, pay

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incentives, fi nancing opportunities for entre-

preneurs (such as angel investors and venture

capitalists), as well as an education system

fostering critical thinking, inquisitive minds

and creativity. Developing all of the above

takes time and experience.

The Global Innovation Index, published

by INSEAD and the World Intellectual

Property Organization (WIPO, a special-

ized agency of the United Nations), does

not list any of the countries studied for this

report among the top 10 innovative coun-

tries. The highest position, number 17 on

the list, is achieved by Israel. Also in the top

30 are Estonia (19), Slovenia (26), the Czech

Republic (27) and Latvia (30).

Maxim Kashulinsky, former editor of

Forbes Russia, believes that the lack of global

experience is a shortcoming of Russian busi-

ness. He points out that there are hardly any

Russian brands or companies with inter-

national scale. Russian Standard vodka and

Beeline, he says, are rare examples of Russian

brands that are known globally. (Beeline is

one of the brands of OJSC VimpelCom, one

of the world’s largest integrated telecommu-

nications services operators, which covers

Global Company Owners

6% of the world’s 2,000 largest public companies are owned or co-owned by billionaires from Central and

Eastern Europe, Africa or the Middle East

Bill ionaires

14% of the world’s billionairescome from Central and Eastern Europe, Africa or the

Middle East

S O U R C E : F O R B E S

18 | GLOBAL WEALTH AND FAMILY TIES

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territory in Asia, Europe and Africa and has

209 million subscribers.)

Ukraine’s Pinchuk stresses the importance

of a global business mindset: “We need to

understand that competition for resources and

clients is not with competitors from across the

street or from another city, but with millions

of businesses around the world. Global think-

ing in developing innovative approaches and

effi cient business processes is crucial.”

Uganda’s Ruparelia puts international

expansion in perspective when he says: “I

personally think there is enough to do in

Africa. So it’s best to concentrate in Africa,

but with a global outlook and awareness.”

Forbes Turkey’s Guven also points to the

achievements of billionaires whose compa-

nies have fl ourished beyond Turkish borders.

Among them is Turkcell, founded by

Mehmet Emin Karamehmet, a mobile phone

operator and the fi rst Turkish company

listed on the New York Stock Exchange.

Another international Turkish company is

Tav, founded by Sani Sener. Tav operates the

Ataturk airport in Istanbul, as well as airports

Expanding their companies globally is what gains businessmen from emerging markets the most admiration by the Forbes Wealth Panel.

in several other countries, including the

Prince Mohammad Bin Abdulaziz airport in

Saudi Arabia, as well as the Riga and Tbilisi

international airports. Turks are also proud

of Vestel Group, a maker of home appliances,

whose television sets are sold all over Europe.

In Africa, Nigeria’s Dangote is

admired for international expansion.

His Dangote Group—a cement,

sugar-refi ning, fl our-milling and

salt-processing conglomerate—has

the biggest cement plant in the Southern

Hemisphere, with operations in 14 African

countries and plans to open cement plants in

Myanmar and Iraq. “He is well on the way

to realizing his dream of an African multi-

national,” says Chris Bishop, editor of Forbes

Africa. Dangote is planning to list the com-

pany on the London stock exchange this year

and gain further international exposure.

In the Czech Republic, Forbes Czech

editor Petr Simunek also sees global oper-

ations as an achievement. He quotes the

example of Petr Kellner, who with a net

EM ERGING MARK E TS18 | EMERGING MARKETS


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worth of $8.2 billion is the Czech Republic’s

richest man. Kellner continues to expand his

insurance and banking empire. His company,

Home Credit, a lender, is expanding business

in China while also launching new projects

in India and Indonesia. Kellner also has big

retail plans in Russia, where he purchased

the remaining 50% stake in electronics

retailer Eldorado.

Simunek also points to two other suc-

cessful Czech brands that have made it

internationally. They are computer antivi-

rus companies AVG Technologies (listed on

the New York Stock Exchange) and AVAST,

which are among the world’s biggest compa-

nies in their fi eld.

In Israel as well, Boaz Bin-Nun,

former editor of Forbes Israel,

credits “those who were innova-

tive, consistent and [have stuck to

a] relatively narrow line of busi-

ness, such as high tech.” Boaz Bin-Nun

points to the importance of a focused busi-

ness and building a company organically for

a long time based on innovation, as opposed

to buying up many companies with lots of

debt (and often attempting to restructure that

debt).

Among the Israeli brands and companies

bin Nun defi nes as innovative is Mellanox

Technologies, a leading supplier of inter-

connect solutions for servers and storage

systems, which is listed on both Nasdaq and

the Tel Aviv stock exchange. Other innova-

tive entrepreneurs, according to Bin-Nun,

include Gil Shwed (net worth $1.9 bil-

lion), founder of Check Point Software

Technologies, the world’s leader in Internet

security products, and SanDisk cofounder Eli

Harari, an Israeli engineer whose inventions

allow the use of fl ash memory in smart-

phones and digital cameras.

Just like in mature markets,

technology is seen as the indus-

try that will vault emerging

markets ahead, transforming

them into high-value-added

producers who do not need to rely on

inexpensive labor or natural resources for

growth. So far, perhaps the most visible

claim to glory from the emerging mar-

kets in terms of famous technology brands

is Skype. Even though the service was

founded by Swedish and Danish business-

men, it is the Estonians who developed the

actual technology. (No wonder then that

Estonia is ranked a high 19 on INSEAD and

WIPO’s Global Innovation Index.)

Pinchuk also wants his country,

Ukraine, to participate in the global tech-

nology boom. He created the Internet

business incubator EastLabs to leverage

the country’s great engineering tradition.

“Using, as in other areas of our business,

innovation as a principle, we are, I hope,

creating a center of energy for the future

economy of Ukraine,” he says.


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The level of wealth dis-

play, as well as its forms,

varies by region and individ-

ually. Overall, the wealthy

in mature markets (North

America and Western Europe) like to display

their riches slightly more than their counter-

parts in emerging markets analyzed for this

report. In terms of wealth display, the Forbes

Wealth Panel awarded mature markets 6, and

emerging markets 5.3, on a scale from 0 to

10, with 0 being very discreet about wealth

and 10 being total display.

There are, however, vast regional diff er-

ences among emerging markets. The Forbes

Wealth Panel ranked the wealthy in Africa

and Central Europe as the most under-

stated, awarding them the rank of 4.5 and

4.6 respectively. Russia received a 7, and the

Middle East proved to be the most open in its

wealth display, at 8 (see table, page 21).

How do the international editors of

Forbes explain the reasons for these diff er-

ences in approaches to the display of wealth?

In Central Europe there is a culture of

relative discretion, which Serafi n says may

still be a remnant of socialism, and on the

surface at least, the face of egalitarianism.

Under communism, social status was usually

signaled not by income but by perks associ-

ated with high-ranking membership in the

Communist Party. For those outside the

political system, the status came from educa-

tion and elevated, often academic, titles.

The relative restraint of Central

Europeans may be a vestige of associating

social status with non-material aspects. It

is merely relative though, as ultra-wealthy

Central Europeans also favor expensive cars,

and show their houses or private planes in

magazines.

In some countries, adds Serafi n, the dis-

cretion is based on safety concerns, to the

point of “hiding.” For example, the Czech

Republic’s Petr Kellner closely guards any

photos of himself and never allows any of his

family to be taken.

On top of that, the current economic

recessions have strengthened the reluctance

of the wealthy to show off their wealth. Says

Forbes Bulgaria’s Mateev: “Some of them

used to display their wealth, but after the cri-

sis started, in Bulgaria at the end of 2008,

they realized how annoying this is to the

people, and now they are more discreet about

their wealth.”

Not all displays of wealth seem to be

viewed negatively. While cars and mansions

may be perceived as gaudy, art collections,

especially of national treasures, are per-

ceived as enriching the culture. Perhaps their

countrymen view the wealthy as curators of

national heritage, who win renown and rec-

ognition for the country’s achievements.


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But the idea of ownership of art is a

new concept, as under communism art was

thought of as belonging to all people (gov-

ernment) and displayed in museums. For an

individual to own part of that national trea-

sure was deemed impossible, just the way an

individual cannot own a part of history.

In Bulgaria, Vassil Bozhkov, who con-

trols Nove Holding, an insurance and

gambling conglomerate, established the

Thrace Foundation in 2004, introducing the

concept of private art ownership. “By creat-

ing Vassil Bozhkov Museum we succeeded

in changing the traditional opinion that the

museum work belongs only to the govern-

ment,” says the mission statement on the

foundation’s website.

Ukraine’s Pinchuk also sees his wealth as

a means to foster national culture. Says he:

“I do not hide my wealth, but I do not show

it off , and most importantly I try to use it

for improving society. The more you own,

the more you can do for your country. For

example, I am proud that each day around

2,000 mostly young Ukrainians come to see

for free top exhibitions of contemporary art,

including works from my art collection in

the Pinchuk Art Centre in Kiev.”

Equally important, Pinchuk’s founda-

tion not only propagates national art, but also

directly introduces Western achievements by

bringing to Ukraine singers like Elton John

and Paul McCartney, as well as visionaries

like Bill Clinton and Shimon Peres, to share

their inspiration with Ukrainian citizens.

Russia’s billionaires, however, have

become known as keen consumers of lux-

ury brands, which are actively courting

this top clientele. Back in 2006, the famous

Millionaires Fair in Moscow included the

world’s most expensive phone—a diamond-

encrusted model by the Swiss company

Display of Wealth

Mature Markets (United States and Western Europe): 6

Emerging Markets of Europe,Middle East and Africa: 5.3

Middle East: 8

Russia: 7

Central Europe (without Russia): 4.6

Africa: 4.5



22 | GLOBAL WEALTH AND FAMILY TIES

Goldvish for €1.4 million—and the most

expensive car in the world, the Bugatti

Veyron, also priced at €1.4 million. The

French cosmetics company Guerlain specially

made perfume for the fair: one bottle priced

at €35,000, according to the press accounts.

Maybe the spending spree

is the reaction to the lon-

gest and most ideological

period of communism in

Eastern Europe, or the

notion that as inhabitants of an empire, they

are expected to live on a grander scale. Some

believe that the volatility of Russian history

has made Russians live for the day, and spend

freely. A deeper historical interpretation may be

that sitting on the outskirts of Western Europe,

the empire felt the need to compete with

Western achievement on a grand, Eastern scale.

But the Russians may have already reached

their climax in spending. Kashulinsky points

out that the wealth display in Russia is less vis-

ible nowadays and attributes this change to the

emergence of more very rich offi cials and top

managers of state-controlled companies, who

tend to be very discreet. The private sector

simply follows the trend. Also, the billionaires

are becoming older and more conservative,

notes Kashulinsky.

Last year, it was a Russian oligarch,

Vladimir Potanin, whose net worth Forbes

estimates at $14.5 billion, who spoke to

Reuters and expressed his disapproval of the

ostentation that accompanied the arrival of

Russia’s billionaire barons onto the world

stage. According to Reuters, Potanin said,

“The new cool for real oligarchs is a much

more modest mingling among the population

at large.…It is not good to demonstrate your

luxury and your wealth: to rub it in the faces

of others is insulting.”

Interestingly, according to the same

Reuters article, “Potanin’s privileged upbring-

ing as the son of a high-ranking Soviet trade

offi cial and an education at Moscow’s elite

diplomatic academy have always set him apart

from some of the more showy tycoons.” Thus,

just like in the rest of Central Europe, status is

not limited to material goods only, but is also

aff orded by education, which in turn also to

some degree shapes spending patterns and the

display of wealth.

In Russia’s southern neighbor,

Turkey, there are three types of

ultra-rich individuals when it comes

to displaying wealth, says Forbes

Turkey’s Guven. The fi rst group

are the “old rich,” which means the time

of their accumulation of wealth is relatively

“old,” like in the ‘70s, ‘80s and ‘90s. Their

companies are nowadays usually run by the

second or third generation. They typically do

not like to display their wealth. Furthermore,

as they are some of the best-known busi-

ness names in Turkey, they are careful about

wealth display due to security reasons,

because they have always been targets of

kidnapping and blackmail.

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The second group are the ultra wealthy

who have acquired most of their wealth

after 2004. They are usually from a Muslim

conservative background. Some are from rel-

atively less developed, rural parts of Turkey,

not a big metropolis such as Ankara, Istanbul

or Izmir, according to Guven. One of the

reasons they do not like to show off their

wealth is their conservative Islamic back-

ground. There is a well-known saying: “you

should never be able to tell who has money

and who is a true believer.” We can under-

stand from this that faith and wealth should

not be fl aunted.

The third group are the recent

entrepreneurs, many of them

young, who are not coming

from a conservative back-

ground but are on good terms

with the government, and show that they

respect the Islamic way of life. They enjoy

displaying their lifestyle, talking about their

accomplishments and next projects. They

like to show off both their money and their

capacity to make money.

South Africa’s Saad takes a philosophical

approach when he says he is not comfortable

displaying wealth. “We have very humble

beginnings at Aspen. We also realize how

close the line between success and failure

really is. The reality of life is that you come

into the world with nothing and you will

leave it with nothing. A safe never follows a

coffi n. A display of contribution to society is

both more fulfi lling and rewarding.”

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Iga Motylska, sub editor of Forbes

Africa, sums up: “While the rich

do live the good life and in the lap

of luxury, I would say that they are

rather discreet and humble. Also

perhaps, they are aware that were they to

excessively fl aunt their wealth, they would

make themselves an easier target of crime.”

They are prudent to be discreet. Last year kid-

nappers snatched the 84-year-old mother of

Tony Elumelu, a Nigerian multimillionaire

banker. She was rescued four days later and

arrests were made, according to Forbes Africa.

Forbes contributor Mfonobong Nsehe

writes on Forbes.com that “when it comes to

billionaires splurging on toys, Africa’s richest

are not as ostentatious as their foreign coun-

terparts. Africa’s richest folks are a bit more

modest.”

The Middle East comes in with the

highest score for wealth display. Interestingly,

while the Arab countries and Israel diff er

in other categories, they are all consistently

high in terms of wealth display.

The Middle East is known for wealth dis-

play at every level: individual, country-based

and global.

In terms of country-based display, the

United Arab Emirates boasts the world’s tallest

building, the exquisite Burj Khalifa, and a cou-

ple of man-made islands, including one shaped

like a palm tree. Globally too, Middle Easterners

are snatching the most luxurious brands, such as

British luxury retailer Harrods, now owned by

Qatar Holding, which bought it from Egyptian

Mohamed Al Fayed several years ago.


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In mature markets, there is a

culture of family offi ces, in par-

ticular for multigenerational

family fortunes, which help

ultra-wealthy families with their

money management. Traditionally, the

interest in family offi ces and private bank-

ing spikes with intergenerational wealth

transfers. This stage is only beginning in

many emerging markets, where most bil-

lionaires are still fi rst generation.

The necessity for such legal and fi nan-

cial vehicles became painfully apparent

several years ago when a Polish multimil-

lionaire died suddenly, and his fortune

passed on to his son from his fi rst mar-

riage, which led to a lawsuit by the

deceased millionaire’s current partner.

The case was publicized by the media,

and drew the attention of other ultra

wealthy to the need for organized wealth

planning and management.

Often billionaires from emerg-

ing markets work with private bankers

from mature markets, who have a leg up

in terms of experience in dealing with

private clients. While family offi ces in

emerging markets such as Central Europe

do exist, they are not yet a common prac-

tice. Sometimes they are set up off shore.

Turkey may be among the most devel-

oped among emerging markets in terms

of family offi ces. In fact, Forbes Turkey’s

Guven says many major families use fam-

ily offi ces. She adds that real estate and

stock market investments are the most

popular forms of investment in Turkey,

and that Turkey—as well as the regional

Turkic Republics—is the main investment

destination for the rich. Internationally,

investments in Russia, the Balkans and the

Middle East are also popular.

In the Middle East, the wealthy tend

to invest in tangible ventures such as

property, partnerships, commercial ven-

tures or trading, but nothing that pays

interest, of course, says Refaat Jaafar,

former editor of Forbes Arabia and busi-

ness presenter at Sky News Arabia.

Internationally, he adds, the most popular

markets are developing countries. Also,

some of the wealthy invest in properties

such as hotels in the United States and

Europe.

In Central and Eastern European

countries, personal investing by the

wealthy is tied to the level of the devel-

opment of their economies and the

perceived safety of their assets. Forbes

Poland’s Pochlopien says that most ultra

wealthy invest within the country, except

for international vehicles managing their

private money, for which the most attrac-

tive foreign investments are real estate in

Europe and all over the world.

In Bulgaria, the most visible

investments of the ultra wealthy

are sports teams and media. Not

many look at the Bulgarian stock

market, but some of them invest

in the stock market abroad, says Forbes

Bulgaria’s Mateev.

In Russia, according to Kashulinsky,

the wealthy favor real estate and bank

deposits. Some of them invest in

Internet companies, and there are art

lovers, of course.


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In Africa, Forbes.com contrib-

utor Nsehe says that among

ultra-wealthy Nigerians real estate

is the preferred asset class. The

wealthy invest their money both

within the country and internationally, with

the wealthiest Nigerians showing a prefer-

ence for London and South Africa. South

Africa’s Saad says that he invests in the stock

market, with his largest asset being his shares

in Aspen, as is often the case with billionaires

running public companies.

Ukraine’s Pinchuk believes that con-

temporary art is a great investment, because

it is an enormously profi table investment in

Ukrainian society. “What better investment

could you imagine than one where the ROI is

thousands of young Ukrainians every day who

stand in line in front of our museum?” he asks.

Pinchuk draws attention to the fact that

sometimes, however personal wealth is spent

or invested—whether on art, a sports team

or philanthropy—it’s hard to classify such

spending as a pure money-making invest-

ment, pursuit of one’s passion or a desire to

benefi t society.

Sports are among the top investments

and pursuits among billionaires from emerg-

ing markets. According to Forbes, Russian

billionaire Mikhail Prokhorov (the 58th-

richest man in the world, with a net worth of

$13.2 billion, according to Forbes), owns the

Brooklyn Nets, an American basketball team.

Another Russian, Roman Abramovich (the

68th-richest man, with a net worth of $12.1

billion) owns UK’s Chelsea soccer team,

and South Africa’s mining magnate Patrice

Motsepe (net worth $2.65 billion) controls

a South African football club, Mamelodi

Sundowns, which plays in the South African

Premier Soccer league.

Do billionaires buy sports teams to make

money, or to gain the instant international

visibility that a well-known team aff ords, or

purely for their passion for sport?

“There is always a certain level of van-

ity to buying a sports team,” says Kurt

Badenhausen, a Forbes senior editor and

expert on international sports team valua-

tions. “You do not do it if you want to stay

under the radar. That said, there are wildly

divergent reasons for buying a team. Some

do it to make money, many do it for ego

and to rub shoulders with jocks, some do it

N o t a b l e I n v e s t m e n t s a n d P u r s u i t s

Sports: 39

Philanthropy: 35

Politics: 27

Arts: 23

Real estate: 14

S O U R C E : F O R B E S I N S I G H T S R E S E A R C H O F 2 5 0 U H N W I S


for programming for their media interests.

“For super wealthy guys, owning a

sports team is the ultimate toy, but they

vary tremendously on how closely they

watch the bottom line. Making money in

sports is usually about asset appreciation and

not the yearly cash fl ow,” he adds.

Politics has also been the pursuit of the

ultra wealthy in emerging markets, just as it

has been in mature markets. Money helps,

but it is by no means a guarantee of win-

ning an election, as shown by the example

of American multimillionaire Mitt Romney,

the Republican presidential candidate who

lost in 2012 to Barack Obama. Some of the

rich, such as Russia’s Mikhail Khodorkovsky

and Ukraine’s Yulia Tymoshenko, paid a

high price for their forays from business into

politics. Both are currently jailed. Other

billionaires continue to engage in politics.

Naguib Sawiris, Egyptian telecommunica-

tions billionaire, founded the Free Egyptians

Party in the aftermath of Egypt’s revolution.

Philanthropy is also at the beginning

stages in the emerging markets. While phi-

lanthropy in itself is a charitable and not a

money-making endeavor, it is interrelated

with wealth management. In mature markets

the charitable foundations of wealthy families

are often handled by their family offi ces, who

advise families on intergenerational wealth

transfer. They may advise on choices such as

whether to involve descendants in existing

charities, or they may off er to fund charities

chosen by descendants.

Bringing the circle of sports

and philanthropy together,

South Africa’s Saad manages

to combine his passion for

sports and charity into one

endeavor. In April he raised $1.1 million for

pediatric healthcare for the children of Africa

in the Aspen Trans Karoo cycle challenge by

cycling 240 kilometers off -road in 16 hours

through rugged terrain.

Ukraine’s Pinchuk founded an NGO,

Yalta European Strategy. Every year in Yalta

global decision makers discuss the challenges

of tomorrow and Ukraine’s place in Europe.

Among others, Tony Blair, Bill Clinton,

Shimon Peres and Richard Branson have

spoken there with Ukrainian leaders and

students. Pinchuk says that the goal of his

philanthropy is to empower the next genera-

tion to change their country and the world.

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The information in this study is based on an exclusive

analysis of 250 ultra high net worth individuals in 22

countries in Central and Eastern Europe, the Middle East

and Africa. The average fortune of the 250 individuals studied for

the report was $2.8 billion. Forbes Insights also conducted surveys

and interviews with two dozen editors or former editors of local

language editions of Forbes, as well as Forbes wealth analysts and

independent wealth analysts (the Forbes Wealth Panel).

Forbes Insights would like to extend thanks to the following wealth analysts for their assistance with this report:

Boaz Bin-Nun, former editor of Forbes Israel, international business consultantChris Bishop, managing editor, Forbes AfricaHeidi Brown, freelance writer, Russia expertKerry Dolan, senior wealth editor, ForbesMichel Lobe Ewane, deputy editor in chief, Forbes AfriqueBurcak Guven, editor in chief, Forbes TurkeyRefaat Jafaar, former editor in chief, Forbes Arabia;business presenter, Sky News ArabiaMaxim Kashulinsky, former editor in chief, Forbes Russia; Web publisher Slon.ruJohn Koppisch, deputy editor, Forbes Asia Luisa Kroll, senior wealth editor, ForbesIordan Mateev, editor in chief, Forbes BulgariaCaleb Melby, wealth team reporter, Forbes Iga Motylska, sub editor, Forbes Africa Mfonobong Nsehe, The Africa Chronicles, Forbes.comJacek Pochlopien, deputy editor, Forbes PolandGiorgios Retsinas, former senior editor, Forbes Middle EastTatiana Serafi n, international wealth analystPetr Simunek, editor in chief, Forbes CzechPaul Trustfull, editor in chief, Forbes AfriqueViktor Vresnik, editor in chief, Forbes Croatia


AP

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IX STATISTICAL INFORMATION ON ULTRA HIGHNET WORTH INDIVIDUALS IN CENTRAL & EASTERN EUROPE, AFRICA AND THE MIDDLE EAST

■ AGE OF BUSINESSFIRST GENERATION: 78%SECOND GENERATION: 17%THIRD GENERATION: 3%(1% NA)

■ GEOGRAPHICAL REACHLOCAL: only operating in the home countryREGIONAL: operating in neighboring countriesINTERNATIONAL: global operations

INTERNATIONAL: 0.5%LOCAL: 15%LOCAL, REGIONAL: 9%LOCAL, INTERNATIONAL: 5%LOCAL, REGIONAL, INTERNATIONAL: 71%

■ AVERAGE AGE 57

■ GENDER MALE: 98%FEMALE: 2%

■ SELF-MADE, INHERITED, OR INHERITED AND GROWINGSELF-MADE: Individuals who made their fortunes themselves.INHERITED: Individuals who inherited their fortune.

INHERITED AND GROWING: Individuals who inherited their fortune and contin-ued to increase their fortune. They could be making money through their inherited company or a diff erent one.

INHERITED: 4%INHERITED AND GROWING: 16%SELF-MADE: 77%(3% NA)

■ AVERAGE SIZE OF FORTUNE $2,785 million

■ INDUSTRY (TOP FIVE) DIVERSIFIED: 32BANKING: 18OIL: 13INVESTMENTS: 13REAL ESTATE: 11

■ FAMILY INVOLVEMENTNONE: 64%SOME FAMILY INVOLVEMENT: 36%

■ NOTABLE INVESTMENTS AND PURSUITSSPORTS: 39PHILANTHROPY: 35POLITICS: 27ARTS: 23REAL ESTATE: 14

NOTE: Some percentages may not add to 100% due to rounding.

250 UHNWIs


CE

NT

RA

L &

EA

ST

ER

N E

UR

OP

E

■ COUNTRIESCzech Republic, Georgia, Kazakhstan, Poland, Romania, Russia, Turkey, Ukraine

■ AGE OF BUSINESSFIRST GENERATION: 84%SECOND GENERATION: 10%THIRD GENERATION: 6%


LOCAL: 17%LOCAL, REGIONAL: 5%LOCAL, INTERNATIONAL: 2%LOCAL, REGIONAL, INTERNATIONAL: 74%(2% NA)

■ AVERAGE AGE 54

■ GENDERMALE: 99%FEMALE: 1%

■ SELF-MADE, INHERITED, OR INHERITED AND GROWINGSELF-MADE: Individuals who made their fortunes themselves.

INHERITED: Individuals who inherited their fortune.INHERITED AND GROWING: Individuals who inherited their fortune and contin-ued to increase their fortune. They could be making money through their inherited company or a diff erent one.

SELF-MADE: 97%INHERITED AND GROWING: 1%(2% NA)


■ INDUSTRY (TOP FIVE) DIVERSIFIED: 16INVESTMENTS: 8BANKING: 8OIL: 8CONSTRUCTION: 4


■ NOTABLE INVESTMENTS AND PURSUITSSPORTS: 31POLITICS: 21ARTS: 14PHILANTHROPY: 13REAL ESTATE: 6

154 UHNWIs


RU

SS

IA

■ AGE OF BUSINESSFIRST GENERATION: 100%


LOCAL: 20%LOCAL, REGIONAL: 6% LOCAL, INTERNATIONAL: 3%LOCAL, REGIONAL, INTERNATIONAL: 71%

■ AVERAGE AGE 50

■ GENDER MALE: 100%



SELF-MADE: 100%


■ INDUSTRY (TOP FIVE) STEEL: 5OIL: 5INVESTMENTS: 3OIL, BANKING, TELECOM: 3BANKING, IT, REAL ESTATE: 2


■ NOTABLE INVESTMENTS AND PURSUITSSPORTS: 14POLITICS: 11ARTS: 11REAL ESTATE: 6

70 UHNWIs


AF

RIC

A

■ COUNTRIESAngola, Egypt, Kenya, Morocco, Nigeria, South Africa, Tanzania, Uganda, Zimbabwe

■ AGE OF BUSINESSFIRST GENERATION: 74%SECOND GENERATION: 24%THIRD GENERATION: 2%


INTERNATIONAL: 2%LOCAL: 20%LOCAL, REGIONAL: 4%LOCAL, INTERNATIONAL: 2%LOCAL, REGIONAL, INTERNATIONAL: 72%

■ AVERAGE AGE 61


■ SELF-MADE, INHERITED, OR INHERITED AND GROWINGSELF-MADE: Individuals who made their fortunes themselves.

INHERITED: Individuals who inherited their fortune.INHERITED AND GROWING: Individuals who inherited their fortune and contin-ued to increase their fortune. They could be making money through their inherited company or a diff erent one.

SELF-MADE: 82%INHERITED: 4%INHERITED AND GROWING: 14%


■ INDUSTRY (TOP FIVE) REAL ESTATE: 7DIVERSIFIED: 6BANKING: 6OIL: 5RETAIL: 4


■ NOTABLE INVESTMENTS AND PURSUITSPHILANTHROPY: 12SPORTS: 8REAL ESTATE: 6

50 UHNWIs


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DL

E E

AS

T

■ COUNTRIES Israel, Kuwait, Lebanon, Saudi Arabia, UAE

■ AGE OF BUSINESSFIRST GENERATION: 54%SECOND GENERATION: 34%THIRD GENERATION: 7%(4% NA)


INTERNATIONAL: 2%LOCAL, REGIONAL: 26%LOCAL, INTERNATIONAL: 7%LOCAL, REGIONAL, INTERNATIONAL:61%(4% NA)

■ AVERAGE AGE 61




SELF-MADE: 50%INHERITED: 9%INHERITED AND GROWING: 39%(2% NA)

■ AVERAGE SIZE OF FORTUNE$3,249 million

■ INDUSTRY (TOP FIVE) DIVERSIFIED: 10INVESTMENTS: 5BANKING: 4SOFTWARE: 4REAL ESTATE: 4


■ NOTABLE INVESTMENTS AND PURSUITSPHILANTHROPY: 8POLITICS: 6ARTS: 5YACHTS: 3REAL ESTATE: 2

46 UHNWIs

ABOUT FORBES INSIGHTS

Forbes Insights is the strategic

research practice of Forbes Media,

publisher of Forbes magazine

and Forbes.com. Taking advantage

of a proprietary database of

senior-level executives in the

Forbes community, Forbes Insights’

research covers a wide range of vital

business issues, including: talent

management; marketing; financial

benchmarking; risk and regulation;

small/midsize business; and more.

Bruce Rogers

CHIEF INSIGHTS OFFICER

Brenna Sniderman

SENIOR DIRECTOR

Christiaan Rizy

DIRECTOR

Kasia Moreno

EDITORIAL DIRECTOR

& REPORT AUTHOR

Lawrence Bowden

MANAGER, EMEA

Clara Knutson

RESEARCH MANAGER

Miriam Campiz

DESIGNER

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