53.7 F
San Diego
Thursday, Mar 28, 2024
-Advertisement-

Economic Turmoil Takes Its Toll on San Diego’s Wealthiest

Just as the Great Recession took its toll on the ranks of the middle class and poor, it’s also caused considerable pain among the ultra-rich.

In comparing this year’s list of San Diego’s Wealthiest residents to the Wealthiest list in 2007, only 12, or about half, of the 25 on the list three years ago survive. Matters have become so tough this year that a few of the wealthiest from three years ago are missing from the list altogether.

Where have you gone, David C. Copley, the former billionaire publisher of The San Diego Union-Tribune?

Another sign that the landscape for everyone has changed: The 2010 list goes only 20 deep, and the cutoff for qualifying for this year has shrunk to $60 million. Three years ago, the wealthy needed a minimum estimated net worth of $100 million to qualify for placement on the list.

For those with sufficient assets that made the cut once again, only four arrive with an estimated net worth above what they had three years earlier, while one — Conrad Prebys — maintained the same size net worth of $350 million (how did he do that?). The remaining eight survivors’ values all took haircuts ranging from a high of 88 percent by Ernest S. Rady to 3 percent by John J. Moores (a pending divorce will certainly affect that number).

The operative word here is estimated, since only these folks’ personal accountants really know what their true net worth is.

Compiling the Data

What the San Diego Business Journal uses to determine wealth and rank is The Rich Register, an independent research firm that annually compiles data on the nation’s wealthiest folks.

In San Diego, the aggregate net worth of the 20 individuals that qualified this year was $7.3 billion. And while that sounds mighty impressive, it’s down from $12.5 billion, or 42 percent below the aggregate net worth these same individuals held in 2007, according to the Business Journal’s research department.

The biggest loser in the group was Rady, whose name adorns Rady Children’s Hospital-San Diego and the UC San Diego Rady School of Management, among other recipients of his philanthropy.

In 2007, Rady’s net worth was estimated to be $2.2 billion, but during the past several years that’s shrunk to $260 million.

He sustained a severe hit after selling his financial holding company called Westcorp to Wachovia Corp. in 2006. Initially profitable, that transaction turned sour when Wachovia’s fortunes sunk as the 2008 financial crisis unfurled. When Wells Fargo acquired Wachovia — beating out Citibank in a controversial deal — it was at a deep discount.

Pummeled By Downturn

Copley was another wealthy club member who took a serious hit from the economic downturn. In March 2009, the publisher of the Copley Press sold off its flagship daily, the Union-Tribune, to Beverly Hills-based private equity firm Platinum Equity LLC in what was clearly a distress sale whose price wasn’t disclosed.

The situation became so tough for Copley, who turns 59 years old next month, he reportedly sold his Gulfstream private jet, worth an estimated $20 million.

Charles Brandes, the founder of Brandes Investment Partners in Carmel Valley, is another billionaire feeling the pain of the global deleveraging, but at least he’s still a member in the billionaire’s club. Depending on the source, he’s either worth $1 billion, according to The Rich Register, or $1.5 billion, according to Forbes, but any way you slice it, he’s not as flush. Three years ago Brandes’ net worth was reported at $2.6 billion, earning him first place on the 2007 Wealthiest list.

But don’t cry for Charles, 67, who apparently knows how to party. Every year he and his wife, Tanya, throw a big wingding in their Rancho Santa Fe hacienda around Halloween.

In October, pop star Christina Aguilera appeared at the party and sang for about an hour, earning a cool $1 million.

Star Topping the List

A star in his own right, and the wealthiest this year, is Irwin M. Jacobs, the founder of Qualcomm Inc., who retired as its chief executive in 2005, handing the reins of the local telecom firm to son, Paul E. Jacobs.

The elder Jacobs, 77, stepped down as Qualcomm’s chairman in 2009, but still holds more than 12 million shares of his firm’s stock, which has risen to the high $40s in recent weeks. While his net worth declined by $200 million over the three years to $1.5 billion, Jacobs certainly has amassed a nice cushion left to weather whatever is left of this recession.

Moores’ net worth contraction from an estimated $850 million in 2007 to $825 million this year spurs conjecture. The self-made millionaire and owner of The San Diego Padres is selling the team in stages to a group led by Padres Chief Executive Officer Jeff Moorad. Forbes estimated the value of the franchise this year at $408 million.

Moores is also in the midst of a messy divorce to wife, Rebecca, that once appeared all settled, but of late could be headed into a courtroom.

Despite the continued downturn, this year’s list features a few big winners, and a handful of new members, whose overall net worth appreciated by some remarkable numbers.

Wealth Increases

Take Masood K. Tayebi, a high-tech entrepreneur who saw his estimated net worth increase 50 percent from $60 million in 2007 to $90 million this year. Tayebi and his brother, Massih Tayebi, made their millions from Wireless Facilities Inc., an engineering services business that was founded in 1994 and taken public in 1999. The company is now defense contracting firm Kratos Defense & Security Solutions Inc.

Today, the brothers are involved in a number of biotech ventures, and run BridgeWest LLC, a private equity firm that funds other high-tech startups.

Then there’s Peter C. Farrell, the founder of ResMed, the wildly successful business that makes equipment used to treat sleep disorders. Farrell, who makes his first appearance on the Wealthiest list this year, has a net worth of about $80 million, up from $60 million three years ago, reflecting a 33 percent increase. He recently received a Nice Guy of the Year Award from Nice Guys San Diego, a local group of folks that help people who are down on their luck.

That sends the old saw — nice guys finish last — on its head.

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-
-Advertisement-