rich people

"No", says supermarket boss Tony Carter.  "I'm not going to tell you how much I get paid, and no, I don't have a private jet."

In fact, the chief executive of New Zealand's seventh-largest business, Foodstuffs Auckland, gets somewhere in the vicinity of $1.3 million a year.

Hardly likely then that Carter has the same dilemma as others about what he can - or can't - afford to spend his discretionary income on.  "Obviously a lot goes into investments, some is given away to charity ... but there's no tropical island."

A finalist in the Deloitte/Management magazine executive of the year contest, Carter is hesitant when asked whether CEOs are paid too much.  "Salaries in New Zealand tend to be lower than what's available overseas but, like a lot of positions in business, they are driven by the international market.  "I'm not saying we are not paid well or we should be paid more.  But I think even those people who earn what are perceived to be very high salaries in New Zealand could earn more overseas if they wanted to."

He said some under-performing bosses continued to get hefty annual pay rises but argued that much criticism focused on what a person earned rather than how they performed.  "That does hurt. Sure, you are fair game if you do a bad job, but simply just being disrespected for what you earn is unfortunate.  It sends the wrong signal to New Zealanders - we should be trying to be successful whatever we do."

SUIT-ABILITY
A survey of more than 500 chief executives reveals the typical boss is male, 52, has four weeks' annual leave and has been in the job for fewer than five years. He earns an average salary of $216,000 plus $111,000 in extras. He gets at least one of the following benefits: company vehicle or car allowance, telephone costs, club fees, medical insurance, superannuation. And he will have received a 5.9 per cent pay rise in the past year.

The Sheffield Chief Executive Officer Survey also says bosses in Auckland have higher salary packages than those in other parts of the country, with a median value of $297,670. Last year, 56 per cent of CEOs received performance-based pay.

It was worth about 14 per cent of their package, compared to 39 per cent overseas. Only 9 per cent of New Zealand CEOs are female.

The world's largest shopping centre owner, Westfield, wants to expand here by developing more shops and adding to its $3 billion asset base. 

So says Stephen Lowy, 44, joint managing director of Westfield Group, here from Sydney yesterday for the opening of the $210 million Albany centre after a partial opening two months ago.  That new mall has 5.2ha of indoor floor space and although Prime Minister Helen Clark opened it yesterday, the 1800-seat cinemas will not open until next year.

Lowy said that in the last seven years, Westfield had spent an annual average $175 million and it planned to continue.  "We've got 12 centres here with a value in excess of $3 billion so on that alone, we'd be in the top 10 New Zealand companies if we were listed [here]."

Lowy is one of Australia's richest men, with his family's fortune estimated to be at least A$5 billion ($6 billion), second only to Australian publisher James Packer with A$7 billion.  Lowy, a son of Westfield founder and holocaust survivor Frank Lowy, is also a member of Prime Minister John Howard's Business-Government Advisory Group which consults on anti-terrorism strategies and national security issues.

The former US investment banker is president of Art Gallery of New South Wales, a director of the Victor Chang Cardiac Research Institute and a director of the Lowy Institute for International Policy. Westfield's annual report showed he earned A$8.4 million last year, up from A$4.9 million in 2005.

Lowy yesterday emphasised his company's expansion plans here, particularly at Albany where surplus land will allow far more shops to be built soon.  "It's endless. What limits us is only demand of the population," Lowy said.

Westfield is expanding its Newmarket centre, adding a multiplex cinema and further shops, he said. At Riccarton in Christchurch, it is developing a second level and the expansion of Manukau is being completed. 

But the growth here is being far outstripped by a global drive, with Westfield opening five new malls in the last month.  Four weeks ago, it opened the £340 million ($917 million) centre in Britain's Derby, followed by two new centres in Australia at Newcastle and Brisbane. Yesterday was New Zealand's turn with Albany and tomorrow Westfield will open a new centre in Annapolis, Maryland in the US.  "So that's about A$1.5 billion of shopping centres opened in four weeks."

To cater for that rapid expansion, Westfield was drawing many executives from New Zealand, Lowy said.  For example, John Widdup, director of Westfield New Zealand since 2001, has just been appointed to run Westfield America, in charge of 9000 shops in 59 centres worth US$18.7 billion ($24.2 billion). Widdup left Parnell for Sydney about two years ago but has now shifted to the US.  And Justin Lynch, an Australian at Westfield in Auckland for the last seven years, has stepped into Widdup's role. Lynch was this week appointed director of Westfield New Zealand.  Lowy said Jason James, a former leasing manager at Glenfield, had shifted to Britain to run the new Derby centre.

But Lowy baulked at the suggestion that Westfield developed formula-style malls which were much the same throughout New Zealand.  "I would strongly disagree with that. I don't think Albany's the same as any other centre. Every product we do, we challenge ourselves to make it better than the last one," he said.

Mall giant

• Westfield is the world's largest listed retail property group.
• Manages assets worth $73.1 billion.
• Malls in Europe, United States and Australasia.
• Owns 12 malls in NZ worth $3 billion.

Former Telecom head Theresa Gattung left New Zealand's biggest publicly listed company with $5.125 million in cash and 12 weeks annual leave owing.  The company's latest annual report, issued yesterday, shows Ms Gattung received a leaving payment of $3.9 million on top of her $1.25 million salary.

It included a performance incentive scheme of $1,525,000, a long-term incentive of $550,000 and special payments of $1,800,000.  The $550,000 was awarded on condition she does not go to a rival company. She also received $287,516 holiday pay.  Ms Gattung left Telecom in June after 12 years - eight as its chief executive - to take a break horse riding in South America.

She is yet to announce her next move, but just before her departure she told the Herald she had had all sorts of employment offers from around the world - "some more surprising than others ... but it's going to take some time and I want to give it some time, too."  Telecom also paid outgoing chief financial officer Marko Bogoievski a bonus payment to ensure he did not leave the company during the search for Ms Gattung's replacement.

The Sydney Morning Herald reported today that Mr Bogoievski received a $819,700 bonus to ensure he stayed on until the induction of Scotsman Paul Reynolds, who is due to take over Ms Gattung's old job at the end of September.  Mr Bogoievski also received a salary of $2.36 million in the year to June 30, Telecom's annual report showed.  Last month Mr Bogoievski, 45, announced he would leave the company in January after seven years as chief financial officer.

Acting chief executive Simon Moutter was given a special payment of $250,000 for staying on during the search for a new chief executive, on top of his annual salary of $1.71 million.  The company said the two executives were paid the bonuses because they had "critical knowledge and expertise essential to retain through a period of significant change".

Mr Reynolds will be paid a base salary of $1.75 million, plus a $1.75 million performance incentive each year. This may be topped up with a long-term incentive of up to $1.75 million in performance share rights.

- Additional reporting NZPA

An Indian businessman has paid a record price for an apartment, parting with $11 million for a new Auckland penthouse.  But high taxes mean he may spend little time there.

Mike Panjwani - who has business interestsin New Zealand, India, Singapore, Europe and Dubai - has bought levels 29 and 30 of the Sentinel apartment block in Takapuna.  Mr Panjwani has bought the apartment unconditionally, but will not be moving in until early next year because the property is a shell.

Speaking from Singapore yesterday, Mr Panjwani said he might only spend a few weeks a year in the penthouse.  "We don't know how much time we're spending there. My family can't afford to spend months in New Zealand. The taxes are very high."  Some Sentinel units have sold more than once, and units that fetched around $900,000 originally had resold for more than $1 million. 

The 117-unit tower will open in December.  The two penthouse levels are connected via an internal staircase. The unit was sold with a dedicated lift, four basement carparks, lap pool, spa and large glass-walled decks.

Barfoot & Thompson agent Wayne Muir, who acted for Mr Panjwani, said the businessman was impressed with the seaside suburb.  "He sees Takapuna as a premiere urban seaside location and was impressed by the quality and location of the Sentinel."

The penthouse is yet to be fitted out, but will have a combination of bespoke hand-crafted carpet and natural stone flooring.  Apartment walls will be able to be moved, and the apartment will include a home theatre, motorised windows, gas fireplaces, underfloor heating and large deck areas.  Mr Panjwani has owned a house in St Marys Bay, central Auckland, for a number of years. Two years ago, he sold a collection of large Auckland investment buildings worth more than $25 million through his company Empress Leisure to apartment specialist Blue Chip.

Caption: Street level of the 30-floor Sentinel apartment building in Takapuna, Auckland.

The sale means property developer David Henderson's Princes Wharf apartment is now the most expensive penthouse on the market.  That apartment, which went on the market earlier this year and was tipped to fetch $10 million, remains unsold. The apartment occupies the entire top level of the Princes Wharf block above the Hilton Hotel.

Businessman Colin Giltrap is understood to have set the previous apartment price record for a penthouse in Lighter Quay's North, on Auckland's waterfront.  Mr Giltrap previously lived for about 20 years in a Herne Bay waterfront home that he sold four years ago for $7.2 million.

MILLION-DOLLAR DREAMS

• Most expensive apartment for sale: $10 million Princes Wharf penthouse owned by property developer David Henderson.
• Most expensive house (not for sale): Graeme and Robyn Hart's sprawling $20 million Glendowie mansion.
• Most expensive property for sale: Pakatoa Island, Hauraki Gulf, $35 million, owned by businessman John Ramsey of Crusader Meats.
• Next most expensive: Cowes Bay estate on Waiheke Island, $30 million, 36ha with 1200sq m plantation-style mansion

New Zealand's ranks of double billionaires have swollen, says a list of the country's richest people. Those with a personal fortune exceeding $2 billion include food and timber tycoon Graeme Hart, New Zealand's wealthiest man with $2.75 billion, according to the National Business Review's Rich List.

He is closely followed by the Todd family, a Wellington-based dynasty with a $2.6 billion fortune, and Eamon Cleary, an Irishman once described as New Zealand's richest farmer, whose property empire is now worth a cool $2.1 billion. Last year his wealth was estimated at $280 million but thanks to record high dairy prices and land values, his fortune has rocketed. Both with a $2 billion fortune are brothers Christopher and Richard Chandler. In December the brothers dissolved their 20-year partnership in their private investment firm, Sovereign Global Investment.

Also among the billionaires were the Goodman Family ($1.8 billion), and New Zealander-turned-Russian-magnate Stephen Jennings ($1 billion).

Rounding out the top 10 were the family of deceased alcohol baron Michael Erceg ($700 million), Douglas Myers ($700 million), and Sir Michael Fay and David Richwhite ($660 million each). The richest woman was Kathmandu founder Jan Cameron, with $300 million. Raising the minimum qualifying entry to $50 million from $25 million saw entrants fall to 176 from 222 last year. However, the overall wealth of Rich Listers grew 11 per cent to $39.07 billion.

NBR Rich List editor Andrea Parker said "$50 million is the new rich. That's the word according to this year's NBR Rich List. "For the past three years, the Rich List threshhold has sat at $25 million. It is time the bar was raised. "As Lloyd Jones writes in his article about attitudes to wealth: 'Today anyone who has title to property in the inner-city neighbourhoods of Wellington or Auckland or owns a shack on a piece of coastline is by proxy a millionaire. Millionaire is no longer a big deal'."

More interesting are the newcomers with property and real estate featuring along with technology and manufacturing. The self-made-man model is alive and well in the form of 38-year-old Manukau real estate magnate Don Ha, who comes in at 143rd equal overall with his financial worth estimated at $60 million. Not bad for a Vietnamese refugee who was just a kid when he arrived in New Zealand in 1980 with his penniless family. The family opened a string of bakeries in South Auckland but Mr Ha went his own way, importing shoes and belts from Asia, only beginning his real estate career in 1994.

Mr Ha became a top salesman in the Professionals Group, selling 86 properties in his first year. He was headhunted by the Ray White Group in 2004 and now owns Ray White Manukau, which has subsequently achieved record-breaking sales. Mr Ha shelled out $2 million on a Zabeel colt from champion racemare Sunline at the Karaka yearling sales in January.

Another to bask in the glory of self-made-man is Terry Serepisos, a Greek-born Wellingtonian who according to the magazine would be a Footballers' Wives dream with his flash cars, dress sense and ability to party hard. Worth $100 million and 88th equal overall, the property developer also backs the Wellington Phoenix soccer club, which he tells the NBR was an "investment from the heart".

Not only that, Serepisos sponsors the Wellington Cup carnival and the city's basketball team. Geoff Ross, who is worth $35 million according to NBR after selling his vodka company 42 Below to Bacardi for $139 million, tells the magazine that the biggest mistake people make when they're trying to start a business is undercapitalising. "They undercapitalise. They don't fully commit to it. They sort of half-commit. "That's my own criticism of myself - I wish I'd gone harder, faster, sooner and bigger."

Some directors got bumper pay rises in recent years and others got nothing - but the average still vastly outstripped rises for other workers.

A study by Institutional Shareholder Services found the average fee for a non-executive director rose nearly 25 per cent from $49,253 in 2004 to $61,416 last year.  Telecom and Fletcher Building chairman Roderick Deane was the highest-paid director last year, at $665,500.  Wayne Boyd was second with $392,961 for his role on the Telecom board and his chairmanships of Auckland International Airport and Freightways.  Third was Keith Smith with $345,000 for his seat on the PGG Wrightson board and chairing Skellerup, Warehouse Group and Tourism Holdings.

The rate of pay increase for directors over the period was more than three times that of inflation - based on a consumer price index rise of 6.9 per cent - and four times the 5.9 per cent growth in wages as measured by the Labour Cost Index.

But ISS lead analyst Martin Lawrence said there was a two-tier market for director pay.  "There are some big companies where director fees appear to be tracking the increases in Australia, albeit at a slower rate, and then there is a large group of companies, some big and some small, where director fees aren't increasing at a rapid rate," Lawrence said.

Of 177 directors who, for the entire period, sat on a board of one of the top 48 listed New Zealand companies surveyed, 20.3 per cent did not get a pay rise, and 12.4 per cent got a raise of at least 50 per cent, the study said.  "It is unheard of in most markets to have directors whose fees have not moved for three years," Lawrence said.

Australia and the UK had shown a substantial growth in fees after corporate collapses in 2001, with non-executive director fees for the top 100 listed Australian companies rising on average 81 per cent between 2001 and 2006.  Some New Zealand firms were following the overseas trend but not as rapidly.  "It seems to be explained by some New Zealand-specific facts, some of which are probably cultural."

Another was that New Zealand did not have the company collapses in 2001 and 2002 which increased attention to corporate governance.  International comparison on pay levels was more relevant for companies with overseas operations and markets, although Lawrence said he was startled by generally how much lower director fees were in New Zealand.

The best paid directorships were relatively concentrated.  Last year 28 directors on 35 boardroom seats each received at least $100,000 a year from a company. Five directors held two of these seats and one had three.

Many larger New Zealand firms did not pay the same as similar-sized operations in Australia.  "That seems to suggest there's some cultural factor that says because Australian directors are paid a lot doesn't mean that we will be," Lawrence said.

Some companies towards the bottom end of the pay rise scale had long established boards with powerful strategic shareholders, he said.  "In that kind of scenario director and executive pay doesn't tend to increase very fast."

The 22 directors whose pay rose by at least half between 2004 and 2006 were associated with seven companies - two of which had profit grow at a faster rate than fees and one of which had a drop in profit.  Fees in New Zealand had remained relatively constant as a proportion of operating cash flow and net profit, although pay did not seem to be necessarily related to company performance, Lawrence said.

"You could argue that directors fees shouldn't be directly related to performance, that they should be sufficiently divorced from the swings and roundabouts of the company so that they're not making decisions with an eye on what their fee will be this year," he said.  "You want them to be saying, 'Well this might hurt the company this year but in three years it'll be worth it for everybody involved'."

Des Hunt from the New Zealand Shareholders' Association said there had to be a relationship between directors fees and the average salary within the company and living standards.  "Living in Sydney is a lot more expensive than, say, living in Auckland," Hunt said.  Comparing companies was not a good guide, he said. "It's where a company is trying to head, the sort of skills required ... the performance of the company would have a bearing on how these people should be rewarded."

Institute of Directors chief executive Nicki Crauford was happy to have performance-based pay for directors, although it was hard to make it work.  "You're wanting directors to consider the business over time, in many cases a substantial period of time, because you want them to grow the business in the medium term," Crauford said.  "So short term financial targets can be misleading."

New Zealand directors were very poorly paid which was a concern.  "If we're going to want quality directors to run quality businesses then we have to pay them accordingly."

Top paid directors 2006

• Roderick Deane: $665,500 - chairman Telecom, Fletcher Building.
• Wayne Boyd: $392,961 - chairman Auckland International Airport, Freightways; director Telecom.
• Keith Smith: $345,000 - chairman Skellerup Holdings, Warehouse Group, Tourism Holdings; director PGG Wrightson.
• Rod McGeoch: $309,889 - chairman SkyCity Entertainment; director Telecom.
• Gary Paykel: $297,469 - chairman Fisher & Paykel Appliances, Fisher & Paykel Healthcare.

Changes 2004-2006

• 24.7 per cent rise in average director pay to $61,416.
• That's four times faster than the growth in wages.
• And three times faster than inflation.
• 12.4 per cent of directors given more than a 50 per cent rise.
• 20.3 per cent of directors saw no increase.

BRW Rich 200 members have offloaded assets valued at more than $15 billion in the past year. So why have they done it and what does it mean for the economy?

Australia's super wealthy have engaged in an unprecedented level of selling over the past 12 months, disposing of more than $15 billion worth of assets. Enormous fortunes have been made, empires have been liquidated overnight, careers have ended and new businesses have been born. The economy is awash with money and private equity firms, property developers and public companies are desperate for new assets to boost returns. BRW Rich 200 members such as James Packer, Kerry Stokes, Solomon Lew and Lang Walker have been presented with deals that were simply too good to refuse.

But there are other reasons behind the great sell-off. Some Rich 200 members are selling up to expedite the transfer of wealth to their children. Some just want to retire. Others are seizing the opportunity to enter new businesses or rebalance their investment portfolios. And in what should be a warning for the business community, the Rich 200 - who are legendary for their ability to spot trends - are also selling up because they see trouble ahead.

Queensland billionaire John Van Lieshout was one of the first Rich 200 members to sell up last year. In May 2006, Van Lieshout offloaded his Super A-Mart furniture business to the private equity group Ironbridge Capital for $500 million. Van Lieshout, a Dutch migrant who arrived in Brisbane as a teenager in the 1960s and owned his first furniture store by the age of 23, built Super A-Mart into a 21-store chain with revenue of more than $350 million. The business was his life's work, but Van Lieshout knew it was time to sell up. "I got 13 times earnings," he says. "I think only once in a lifetime someone comes along and offers you that sort of money."

Greg Will, a PricewaterhouseCoopers partner who looks after a number of moneyed clients, says it is a common refrain among the legion of wealthy sellers. "There are some prices for businesses out there that are just too good to refuse. We've never seen anything like the past 12 to 24 months."

Market observers have been regularly surprised by the magnitude of many deals involving Rich 200 members. Property commentators were stunned when the Besen family received $621 million for a half-share in its Highpoint Shopping Centre and surprised at the $270 million David Burger received for the Mid City Centre building in Sydney. Media industry insiders were amazed when James Packer got $4.5 billion for a half-share in Publishing & Broadcasting Ltd's media business and when Kerry Stokes sold a half-share in his Seven Network for about $4 billion.

The $130 million Solomon Lew received for his Witchery women's fashion chain was more than most pundits predicted. Harvey Norman executive chairman Gerry Harvey thought Archer Capital's offer for the company's stake in Rebel Sport was overly generous, so he sold up and took a $150 million profit. The founder of the RAMS Home Loans business, John Kinghorn, is selling that business. Some analysts value the company at $500 million, but offers are flooding in about the $1 billion mark.

There is an old saying in the business world: when the rich start selling, the market is about to turn down. Will says many of his clients are worried about when Australia's decade-long period of prosperity will end. "It is definitely a concern for them. Waiting for the downturn is really top of mind, because that's how they have made their investment decisions in the past."

The senior vice-president of Merrill Lynch's private wealth services division, Dara Minbashian, agrees. "If you are a seasoned investor you always get worried when there is so much money around." Van Lieshout has clearly made a judgement that the prosperous times the company has enjoyed thanks to the Queensland population boom could be about to end. "The furniture business is wonderful when there is a housing boom. But it is tough when the housing market isn't going so well."

Indeed, Van Lieshout seems genuinely confused about the state of the Australian economy. As part of the Super A-Mart sale, Van Lieshout retained the property Super A-Mart sits on, including its stores, warehouses and offices (the portfolio is believed to be worth about $400 million). He had planned to plough some of the proceeds from his sale into more property investments but he is struggling to pick the market. Prices have skyrocketed in recent months to levels Van Lieshout cannot understand. "There must be so much money in the market that people are willing to pay anything. I don't want to sit on the sidelines for too long because maybe the market will stay like this. It makes me a little bit worried. Whenever I see that it's too good for too long I get concerned. It is certainly different to what I have seen in the past 40 years."

Some property-industry moguls are also wondering whether the market is near its peak. In November 2006, Lang Walker sold a $1.1 billion chunk of his property portfolio to listed property group Mirvac. Included in the deal were shopping centres and a slew of retail, commercial and industrial property. Walker started the sale process in March 2006, but most potential suitors baulked at the price he was asking. In the end, Mirvac picked through the assets individually and Walker sold only those he felt were priced correctly. West Australian investor and Rich 200 member Stan Perron also purchased some of Walker's assets. What makes the sale particularly significant is that it is the second time

Walker has sold the bulk of his portfolio. In 2000, he sold the listed Walker Corporation to Australand for $110 million, brilliantly picking the top of the cycle. Bill Bowness sold the Australian portfolio of his Wilbow Corporation to listed property company FKP for $330 million in September 2006. The sale was partly driven by Bowness's desire to step away from what he calls the "property coalface" and diversify into areas such as mezzanine financing.
Last year, however, he said he was shocked at the prices being paid for property assets. "There is so much money around and there are fund managers who are wanting to do all sorts of things," he says. "There will be tears."

But it is not all bad news. The managing director of Goldman Sachs JBWere's private wealth management division, Paul Heath, believes there are other reasons for the great sell-off besides big prices and concerns about the business cycle.

He points to succession as a big motivator. Australia's wealthy entrepreneurs are ready to hand over to their children, but are finding the next generation unwilling to grab the reins. "The younger generation see other opportunities that don't involve the family business," Heath says. Many rich entrepreneurs are finding that selling their business and splitting the proceeds is a lot easier than trying to persuade unwilling family members to take over.

Goldman Sachs JBWere's head of investment banking, Clark Perkins, says the spate of sell-offs also has much to do with the rapid growth of the private equity industry in the past 12 to 18 months. While wealthy business people have always had the option of selling their business through a public float or a private trade sale, the extremely flexible nature of private equity deals gives them a range of new options. They can sell a business in its entirety, or just sell a chunk. They can arrange to stay in the business for five years or stop work immediately. They might, like Van Lieshout, sell the operating business and keep the property.

"Private equity is providing ... a very real alternative that just didn't exist five years ago," Perkins says. He adds that a private equity deal is also often more palatable for a wealthy entrepreneur than selling out to a bitter rival through a trade sale or facing the public scrutiny a float brings. "Private equity provides a discreet, more confidential exit compared to the public market."

Of course, not every sell-off was motivated by a desire to exit. Perkins says many wealthy business people are also looking to do private equity deals to take their business to the next phase of its life. "They are looking for some fresh thinking and a drive to push the business to grow again." That is exactly why James Packer and Kerry Stokes did private equity deals.

By selling half of their media businesses for $4.5 billion and $4 billion respectively, Packer and Stokes have built massive war chests with which to make other acquisitions and expand their businesses. Packer has already made several acquisitions in the gaming sector while Stokes appears poised to play a big part in the coming shake-up of the Australian media sector.

So will the great sell-off continue? Almost certainly. Private equity funds are swollen with cash and must find ways to spend it if they are to earn the returns their investors demand. This means Rich 200 members will continue to be courted and tempted with huge prices for their businesses.

Rich 200 members are also likely to court private equity firms. Perkins says wealthy individuals and families now understand the private equity model and are more confident it can deliver them a profitable exit or capital to grow.

The sell-off will also continue as the members of the Rich 200 age. Merrill Lynch's Minbashian says: "The next 10 years will see a lot of people selling up simply because they are getting old. These guys are getting to 70 and 80 and 90 and they don't want to run a business any more."

OFFLOADING
Rich 200 members who have sold assets in the past yearBill Bowness Sold the Australian assets of his Wilbow Corporation to FKP Property Group for $330 million in September 2006. He is pessimistic about the Australian property industry and was keen to cash out while the price he could get for his portfolio was sky-high.
David Burger The Sydney property developer sold the Mid City Centre in Sydney for $270 million in May last year.

John Gandel The shopping centre magnate cashed up last year by selling his management stake in the $4.8 billion CFS Retail Property Trust to Commonwealth Bank for about $400 million. In December 2006, Gandel also sold his portfolio of upmarket retirement villages to a consortium of Macquarie Bank and property group FKP for about $105 million.

Tony Haggarty and Chris Ellis In October 2006, Haggarty, Ellis and their fellow directors of Excel Coal agreed to sell the company for $1.8 billion to Peabody Energy, the world's largest private sector coal producer.

Gerry Harvey The veteran retailer sold Harvey Norman's $185 million stake in Rebel Sport to private equity firm Archer Capital. Harvey Norman made $150 million on the deal. John Kinghorn The jewel in John Kinghorn's investment portfolio, RAMS Home Loans, is on the sale block. There have already been a few offers about the $1 billion mark from suitors including National Australia Bank. Private equity firms are ready to pounce, but a float has not been ruled out.

Solomon Lew Veteran retailer Solomon Lew agreed to sell his stake in Coles Myer to Wesfarmers for about $1.14 billion in April this year, severing his ties with the retail giant after a 20-year relationship. In July 2006, Lew sold the Witchery women's fashion chain to private equity firm Gresham Private Equity for $130 million, about $15 million more than its original offer.

James Packer In October 2006, Publishing & Broadcasting Ltd sold 50 per cent of its media business to private equity group CVC Asia Pacific for $4.5 billion. Packer got the best of both worlds: PBL retains control of the new media company and also gets a pile of cash to pay down debt and sink into expanding gaming assets.

Ralph Sarich Ralph Sarich's property company, Cape Bouvard, sold $500 million of assets to United States conglomerate GE in January. The portfolio includes office buildings in Perth, Sydney and Melbourne. While the portfolio was not officially for sale, Sarich says he had many unsolicited approaches during the previous year. GE paid cash for the assets. Peter Scanlon When Peter Scanlon agreed to sell his stake in ports company Patrick Corporation to logistics company Toll Holdings, the takeover battle for Patrick was effectively over. Scanlon took
$405 million worth of cash and shares from the deal.

Kevin Seymour He put a $250 million portfolio of properties on the market in early 2006 and sold an office building in Brisbane in February for $28 million. He is good at picking market cycles and regularly trades properties to lock in profits.

Kerry Stokes He followed the lead of James Packer by selling a 50 per cent stake in Seven Network to private equity company Kohlberg Kravis Roberts for about $4 billion. Ken Talbot The coalmining veteran, who owns a majority stake in Macarthur Coal, sold his chain of six hotels to Cairns pub baron Tom Hedley in October 2006 for $110 million. Talbot plans to invest the proceeds of this sale in a private mining group. Talbot Group Holdings recently invested $26.4 million in Timor Sea explorer Karoon Gas Australia.

Lang Walker In November 2006, Lang Walker sold a $1.1 billion chunk of his property portfolio to listed property group Mirvac. West Australian investor and Rich 200 member Stan Perron also purchased some assets.

Besen family In March 2006, the Besen family sold a half share and the management rights to its Highpoint Shopping Centre for a mammoth $621 million.

Hannan family After an emotional sale process, the Hannan family sold the newspaper, magazine and online assets of its Federal Publishing Company to News Corporation for an undisclosed sum, believed to be about $340 million.

Knowles family The Knowles family company, Australian Retirement Communities, sold a portfolio of 17 existing retirement villages (home to nearly 4000 residents), three villages under development and six villages in the planning stages to listed property company Stockland in February for $329 million.

Smorgon family In June 2006, the Smorgon family agreed to sell its $550 million stake in steel company Smorgon Steel into the $1.6 billion takeover by rival OneSteel. Smorgon Steel chairman Graham Smorgon said the decision was an emotional one. "But it was a business judgement that needed to be made."

The business of living
What next? That is the question that has confronted many Rich 200 members who have sold their businesses in the past year.

Greg Will, a partner at PricewaterhouseCoopers who works with wealthy clients, says it can be a difficult question for prosperous people who leave their business. "Having a large bank balance is great, but what are you going to do the next day?"

John Van Lieshout, who sold his Super A-Mart furniture for $500 million last year, is representative of many Rich 200 members who say that selling their business allows them to indulge passions such as sailing and golf. "It's a good life. I should have done this years ago really," he jokes.

Will says retirement sounds easy, but it can be very hard for men and women used to the intense lifestyle associated with running a business. Many struggle to find something to fill in their spare time. In most cases, the only thing that helps is finding another company to channel their energies into. "They get some little business interest that soon takes over and the cycle starts again," Will says.

Van Lieshout has plenty to keep him busy. He has retained the properties Super A-Mart sits on, a portfolio believed to be worth about $400 million. He has a small property development firm called Unison and he has established a small office with five staff to examine other investment opportunities. "I'm doing an apprenticeship in trying to learn about money markets and shares and investments," Van Lieshout says. "It is complex and I don't have a lot of education so it takes me a while to understand, but I am enjoying the learning process. He keeps an eye on the Super A-Mart business - it is, after all, his biggest tenant - but says he does not want to interfere with the new owners, the private equity firm Ironbridge Capital.

Van Lieshout, who prided himself on running a very tight ship at Super A-Mart, has caught up with one bit of scuttlebutt that makes him chuckle. "I have heard them say that it is one of the few businesses they haven't been able to trim any costs from."

More than half of New Zealand's total net worth is now owned by the richest 10 per cent of the population.

A new survey by Statistics NZ shows that the distribution of wealth has become even more unequal in 2003-04 than in the previous survey in 2001, when the richest 10 per cent owned only 48 per cent of the country's total wealth. They now own 52 per cent.

The richest half of the country owned 93 per cent of the wealth in 2001, and now owns 95 per cent. So the share of the poorest half has dropped from 7 per cent to 5 per cent.

But the two surveys cannot be compared directly. The 2001 survey, a one-off exercise for the Retirement Commission, was based on "economic units" where a couple counted as one unit, whereas the latest survey is the first part of a long-term sampling to be repeated up to 2010 and is based on individuals.

The new survey includes details which the previous one did not, revealing that the richest 1 per cent of individuals own 16 per cent of the country's wealth, and the richest 5 per cent own 38 per cent of the total.

The median net worth rises with age. The 15 to 24 age group was worth $2400, the 25 to 34 group $31,000, the 35 to 44 group $82,400, the 45 to 54 group $142,900 and the 55 to 64 group had $170,000.

The median drops back in the 65-plus retirement age bracket to $149,500. Overall the median individual is worth just $69,800.

More than half of all the 6.5 per cent of people with negative net worth are aged 15 to 24. This is probably because of student loans.

As in 2001, the latest survey shows that Europeans have by far the highest median net worth ($86,900), followed by Asians ($21,000), others ($19,000), Maori ($18,000) and Pacific people ($6700).

The manager of Statistics NZ's standard of living unit, Andrea Blackburn, told a social policy conference in Wellington yesterday that about 40 per cent of New Zealanders' net wealth was held in residential property. Data on other assets were not yet available.

She said New Zealand's skewed distribution of wealth was similar to Canada's, but still not as unequal as in the United States.

"It's typical of developed countries," she said.

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INVESTMENT

Worth: $350 million

ERIC WATSON continues to be well known as socialite Nicky Watson's ex-husband - his name hasn't appeared too often on business pages over the past year. His Pacific Retail Group has struggled with UK electrical goods retailer PowerHouse, which was taken to court this year for rent avoidance after closing more stores. PRG's local investments include Bendon and Living and Giving. Watson's wealth has been downgraded from last year because of the poor performance of Pacific Retail.

At press time PRG share trading had been suspended while the NZX awaits the company's annual report, held up while an audit of the $145 million sale of Pacific Retail Finance to GE Finance earlier this year proceeded.

The Warriors league team, which Watson has shares in through his company Cullen Sports, was docked competition points and faced financial losses this year when salary cap breaches were discovered. But Watson said he remained committed to the club.

On a more positive note, Hanover Finance, which Watson invests in alongside fellow Rich Lister Mark Hotchin, remains a very profitable business. Its 2005 profit was up 50% from the previous year at $17.4 million.

Watson now lives in London and is renting out his south Auckland homestead, Westbury Estate, for $6000 a night. The property includes a nine-hole golf course, a tennis court, helicopter pad, 15m heated pool and sauna among its many facilities.

2005: $400 million

PROPERTY

Worth: $140 million

PHILIP CARTER has a $40 million war chest from his sale of a former Queenstown camping ground that will be developed by Hanover Group. He is now looking for new investment opportunities. The repositioning of the Crowne Plaza Queenstown, where he took a $20 million joint venture interest, has also taken his focus in recent months. He generally stays in his holiday home there. Between his work at Queenstown and regular trips to Europe and Australia, he fulfils duties as director of Christchurch International Airport. In central Christchurch, he owns hotels, commercial properties and blocks of residential land. At Hanmer he owns a strip of commercial buildings. His headquarters are in the Regent building in Cathedral Square, Christchurch.

Last year he bought a property near Sumner where he will be closer to his father, 89-year old Maurice, who founded the empire that Phillip bought out from other members of the family including brothers Tony, chief executive of Foodstuffs, and David, National list MP. The purchase of the Hurst Seager-designed Kinsey Tce house on Clifton Hill was controversial because he decided to demolish most of it and the neighbours kicked up a fuss because of its historical associations, and possibly something to do with their views. It was the house where Antarctic explorer Ernest Shackleton ate his last supper before heading south a century ago. The demolition squad did a thorough job - right down to an anchor in the garden that had been salvaged from one of Shackleton's ships. It took a couple of calls to his mate, construction magnate Buzz March, who employed the gang, to ensure the anchor was returned after some persuasive talk.

2005: $140 million