Rich Listers tumble

John Key and Peter Jackson are on the Forbes Rich List. Photos / Janna Dixon, Mark Mitchell

The ink was scarcely dry on last year's glossy NBR Rich List when the fortunes of the nation's Who's Who of Wealth began to disappear.

Suddenly the recession was upon us, pulling skids out from under the highly geared entrepreneurs, developers and speculators who had borrowed fearlessly in expectation of rich returns on the back of the property boom and a buoyant economy.

Globally, the recession hit without prejudice causing mega wealthy ex-pat Kiwis such as Stephen Jennings to slash and burn to survive. Moscow-based Jennings sold off a $3.5 billion half-share of his Renaissance Capital investment bank at a bargain $882 million, laid off 6000 staff and was ejected from the Forbes world billionaires' list.

Jennings, like former beer baron Douglas Myers, describes rich lists as "inaccurate". Myers goes further, describing the Rich List as "voyeuristic and passe, inappropriate and inaccurate, even in yesterday's world" in an email from his London office to the Herald on Sunday.

Asked for comment on the shape of this year's Rich List, Myers (worth $700m last year according to NBR) said he had "difficulty knowing in today's volatile markets where I stand from day to day, let alone others."

Myers is on at least two rich lists - 10th equal in New Zealand with investment bankers Sir Michael Fay and David Richwhite, and last month 215th on the British Sunday Times list with $60m lopped off this year's fortune. The remaining $691m still makes him the richest Kiwi living in Britain and his ranking has been bumped up 73 places since last year.

While Myers dismisses rich lists, others will be weeping into their chequebooks over the $400b lost between Britain's 1000 wealthiest, the biggest fall since the list was first compiled 21 years ago.

Closer to home NBR editor Nevil Gibson is expecting the Kiwi Rich Listers' overall wealth, measured in shareholdings, property and cash, to have dropped by about 40 per cent when the next list is published in late July. He says there will be a "few" new names on the list but there will also be some "spectacular departures".

He's considering dropping last year's newly raised entry threshold from $50m - Prime Minister John Key just squeaked in last year - to $25m to find 200 people to fill the list.

This year Graeme Hart is expected to top the list again as New Zealand's wealthiest man ($6b last year) even if his portfolio has bled millions of dollars.

The US-based Forbes Rich List valued Hart at US$4.5b ($8.6b) in March, which would now make him the richest man in Australasia. Forbes says he has lost US$600m in the past year - but gained the top spot because everyone else had lost even more.

Gibson says Hart's true wealth is "hard to judge" because of his level of debt and leverage. Hart owns a remodelled mansion on the cliff at Glendowie, overlooking the Hauraki Gulf, valued at $20m but likely to be worth considerably more. He has a $14m holiday home on Waiheke, a $120m superyacht Ulysses, and private chefs who stock all three retreats.

One business source disputed Hart's huge fortune saying commercial and domestic property investor Michael Friedlander could most likely "buy Graeme Hart and still have change." If so, that puts the reclusive Auckland landlord up there with the likes of Donald Trump and Richard Branson.

While there will be many millions missing from this year's collective Rich List coffers there is little sign of the mega wealthy tightening their belts.

Peter Jackson is understood to be one of two Kiwis buying a new $106m Gulfstream jet to replace his existing one. Eric Watson's business buddy Mark Hotchin is finishing a three-level $30m home on a triple site in Paritai Drive, despite Hanover's troubles. He also owns a $14m holiday home on Waiheke Island and last year had a 50th birthday bash on the exclusive island of Vomo in Fiji.

Not to be outdone, Watson partied up large for his 50th birthday in Turkey last month at a two-day glittering event said to cost $1.16m. Last year NBR valued Watson at $450m - a position he held with former tissue paper magnate John Spencer, filmmaker Peter Jackson, the Goodfellow family and Friedlander - but last month the Sunday Times list in Britain lopped $235m from his fortune, ranking him 492 on the list at $287m. One business commentator said if Hanover was worth $450m last year and little today, Watson's and Hotchin's wealth would have dropped by a half share of that amount.

Conspicuously absent this year will be many property developers, such as Greg Olliver, who was valued at $200m on last year's list but has since faced hard times. Some are facing bankruptcy.

Round town there's a flow-on effect as wives and partners no longer spend thousands of dollars on flamboyant designer clothing, shoes, jewellery and handbags. As one Auckland designer said: "The recessionistas are bad for the fashion industry."

Another designer, Yvonne Bennetti, was forced to abruptly refocus her range on corporate wear when some regular clientele hit by the economic recession stopped spending as much money in her store.

Business commentator Graeme Hunt, who compiled the NBR Rich List with a team for 12 years, says developers have taken a hit because they can't get finance.

Rich Listers with well-established businesses and lower debt will ride through the recession relatively unscathed.

Those who made their money in the 80s, have solid investments and good business models - the likes of millionaires Trevor Farmer and Mark Wyborn - will keep their place on the Rich List, he predicts, as will "old money". "Their investments will take a bit of a hit but they'll be OK. That Paritai Drive set, I think, will always survive."