NBR RICH LIST 2016: Three decades of wealth - The NBR Rich List turns 30

If it “has done nothing else, NBR’s annual Rich List has put the topic of wealth squarely in the ladies’ knitting circle, the works canteen and the rugby club, whether the patrons like it or not.”

Those are the words of the late Graeme Hunt, a former NBR news editor and author whose 2003 book The Rich List charted the changing patterns of wealth creation from the days the early settlers arrived in New Zealand through to the 1987 sharemarket crash and to the end of the dotcom bubble.

“While many New Zealanders might consider discussion of wealth in bad taste, or even highly offensive, they want to read about it nonetheless,” Hunt wrote.

But for him and for NBR, the annual Rich List is not an exercise in voyeurism. It’s about celebrating success, sharing important lessons and the determination that allows one to bounce back from failure.

It is the antithesis of the tall poppy syndrome; some even say the bible of wealth creation in this country.

And over the past 30 years there have been incredible highs and lows, some amazing stories and hopefully a lesson or two learned.

Boom then bust
The Rich List first appeared in 1986.

Back then, it started with 56 individuals and 12 families with a total minimum net worth of $5.3 billion.

In August 1987 at the height of the sharemarket boom, the list contained 76 individuals and 25 families and a total of $8 billion.

Two months later, Black Tuesday saw the biggest cleanout in paper wealth to date. The August 1988 Rich List contained 36 individuals, 22 families and a total combined net worth of $4.47 billion.

The list was essentially cut in half.

Yet many of the victims returned with vigour. Men like Adrian Burr, Mark Wyborn and David Muller re-emerged with the astute purchase of the Viaduct basin in Auckland.

Craig Heatley survived the skirmishes at Rainbow Corporation and then shot into orbit with Sky Television.

In fact, many of the original Rich Listers still appear today – Sir Ron Brierley, Sir Bob Jones and Heatley to name a few.

Others have quietly fallen off the list as the threshold lifted to $50 million or simply passed their wealth on to family members.

Bubble territory
The rise of the internet made plenty of millionaires and then quickly spat a few out when the dotcom bubble burst at the turn of the century.

In 1999 there were 135 individuals and 36 families on the Rich List with a combined net worth of $11.2 billion.

Newcomers included Nick and Tim Wood, of Ihug, Evan Christian of Advantage Group, Telemedia’s Chris Jones and Sausage Software founder Steve Outtrim.

In early 2000 technology shares tumbled along with the fortunes of many internet entrepreneurs.

But by 2003 much of that turmoil had passed and the number of individuals swelled to 157, 37 families and the total net worth had mushroomed to $18.4 billion.

Through both the 1987 and 2000 crashes, the list of survivors was larger than the list of casualties.

As Hunt noted in his book, failed or battered entrepreneurs have the ability to rise from the dead and family fortunes can be recreated.

Back to basics
No better example of this exists than Graeme Hart.

Born in 1955, self-made businessman Graeme Hart was named in 2002 as New Zealand’s richest man and first individual billionaire, ending the long run at No 1 of cashed-up brewer Sir Douglas Myers.

Publicity-shy and a loner in business, Hart suffered huge losses after his investment in Burns Philp & Co in 1997 turned sour. But he stayed firm, injecting $A115 million to keep the company afloat, and Burns Philp recovered, lifting his fortune accordingly.

In 2003, Burns Philp took over Goodman Fielder group, making Hart a dominant player in the transtasman food business.

In the first four weeks that Goodman Fielder was under Burns Philp control, Hart and his right-hand man Tom Degnan made cost savings of $A25 million. The casualties were mostly Goodman Fielder’s head office staff.

In the mid-2000s Hart changed tack and decided food packaging was the way to go. He launched an audacious $3.3 billion takeover of Carter Holt Harvey, and then, incredibly, bought Alcoa’s packaging business for $US2.7 billion and renamed it Reynolds Group.

The deals got larger, including a $US6 billion purchase of Pactiv Corp, a $US4.5 billion acquisition of Graham Packaging and a E1.7 billion purchase of Sig Combibloc, which was sold last year for E3.6 billion.

Although Hart survived the global financial crisis shakeout of 2008, there are recent signs of stress in his debt-laden empire.

But even with $2 billion sliced off his net worth this year, he still sits on top of the list with a cool $7 billion.

Damage control
The global financial crisis had a big impact on the Rich List but it was the more localised finance company sector meltdown that resulted in the most change.

The dark side of business and investment was exposed. Men like Rod Petricevic were imprisoned for their white-collar crimes. The late Allan Hubbard, once the South Island’s richest man, came unstuck, with South Canterbury Finance imploding, resulting in a government bailout.

A swag of property developers was sent packing, tails between the legs, reputation shattered.

But the market lived on. Share prices bounced back and are above pre-crisis levels. Big investors have seen huge gains to their share portfolios.

Meanwhile, the rampant property boom has seeded fortunes for astute and opportune investors up and down the country but especially in Auckland, sparking intense political debate.

There are fears the party may come to an abrupt end and fortunes won will be lost.

But the cycle will begin again.