By Staff writer
Welcome to the 12th edition of the Arabian Business Rich List, our annual countdown of the 50 wealthiest Arabs.
It hasn’t been the best of years for the world’s wealthiest people, and that has certainly had its effect on the Arabian Business Rich List, which is being published for the twelfth time. The total wealth of the 50 individuals and families we have ranked as the Arab world’s richest has fallen by 9 percent over the course of the last year — and virtually no-one remains unscathed.
There are, of course, plenty of reasons for the drop, and there have been precious few safe havens over the course of the last year. If you had parked your cash into the relatively safe zone of US equities, you would have been disappointed — both the Dow and the S&P closed the year in negative territory, marking the worst year since 2008. The news wasn’t much better back here in the Middle East. The Saudi bourse — by far the Arab world’s largest — was down 17 percent in 2015.
Has there been better news in 2016? Hardly. Global stock markets have already posted record poor performances for the first week of the year, and the oil price just keeps on sliding.
But at least the names on our list can count themselves lucky they aren’t the Mexican billionaire, Carlos Slim, who saw $19bn wiped off his net worth in 2015.
Still, there’s some consolation to be seen at the top of the Rich List, where Saudi Arabia’s HRH Prince Alwaleed has maintained his top position for yet another year. Rising to second place this year is the world’s richest banker, Joseph Safra, while the secretive Olayan family are down in third.
As with previous years, some entries have dropped out of the list for various reasons. Those include the relinquishing of roles in key organisations, and the difficulty associated with assessing some individuals’ wealth.
How we did it
Much has changed since the first time we published our Rich List back in 2004. At the time, it courted considerable controversy as no magazine had ever attempted to assess the wealth of the world’s richest Arabs, and nobody had ever come close to publishing it in such detail.
In the intervening 12 years, the process of compiling the list has become a far more refined process. Our first list raised many eyebrows, and a number of individuals have since approached us to clarify what they thought was a more accurate reflection of their wealth, while others we had not included came forward to provide detailed figures of their wealth.
As has become customary, a significant number of names on the list have this year assisted us in assessing their wealth. Of course, not everyone has been this helpful, and once again our team of researchers has conducted a widespread assessment of Arab wealth. We initially looked at the names of just under 400 companies and individuals in an attempt to evaluate their assets.
In each case a family or individual’s stake in a company has been obtained. We have then assessed the value of that company. Where this information is publicly available through stock exchanges, an exact figure has been obtained.
Where not, we have judged a company’s value in comparison to that of a similar but listed company in the same country, based on an equivalent price/earnings ratio.
Where no comparison is available, we have estimated the total value of all assets in a company, including those of subsidiary operations that could in theory be separately sold.
Where sales and profit figures are available, we have assumed a very conservative price/earnings ratio of 10 in order to obtain a company’s valuation. All individual assets, such as property, cars and yachts have been estimated separately and added to an individual’s total.
Where an individual’s wealth is held largely in cash, we have assumed an annual increase based on the average interest rate for the past five years in the individual’s country of residence (though we accept that funds may be held offshore — if anything, therefore, the estimate is likely to be conservative).
We have also added all share sales to the final figure, based on official stock exchange releases between 1999 and 2015. The value of land owned by individuals has been estimated based on average market values between January 1, 2015 and December 31, 2015.
As always we should stress that the figures are purely our assessment of wealth. Given the closely held business arrangements of many of the entries on our list, the Middle East is perhaps the toughest area in the world when it comes to accurately evaluating an individual’s net worth.
As always, our list does not include members of royal families, or politicians. However, we have made an exception in certain cases where we believe that the wealth has been amassed purely through business achievements (such as for Prince Alwaleed).
Sources of information:
Bloomberg (including the Bloomberg Billionaires Index); Dow Jones; Reuters; Economic Intelligence Unit; stock exchange data from 21 countries; Forbes; The Sunday Times; Fortune; The Economist; CIA World Factbook; Yahoo Finance; UK Land Registry Records; US Land Records; Ministry of Information data from 12 countries; Hoover’s company reports; Credit Suisse Global Wealth Report; Associated Press; Financial Times; World Bank MENA Development Reports; Capgemini World Wealth Report
Rich List researchers:
Ed Attwood, Courtney Trenwith, Shane McGinley, Sarah Townsend, Neil Halligan, Lubna Hamdan, Tamara Pupic, Edward Liamzon, Anees Dayoub, Rasha Owais, Samer Batter.For all the latest industry news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.