The personal trainer who made fitness his pathway to a fortune
▶ Wealth and health feature in our regular round-up of the super-rich
As the Instagram co-founders break away to do their own thing, the Brexit-backing JCB Service chairman rides the wave of a global construction boom. He is what the financial elite habe been involved in lately.
Nerio Alessandri
Nerio Alessandri is moonlighting as the world’s wealthiest – and perhaps best dressed – personal trainer.
Sporting a blue blazer and chinos, the billionaire founder and chief executive of Technogym is demonstrating his company’s top-of-the-line Kinesis Personal Vision machine, whose sleek combination of aluminium alloy arms, cables and polished steel panels allows users to perform more than 200 exercises.
Mr Alessandri, 57, makes it look easy, while others struggle around him.
The company’s gleaming headquarters in Cesena – a city near the Adriatic Sea and about an hour’s drive from Bologna – reflects the world’s booming healthy living economy. Largely the preserve of bodybuilders in the 1980s, it is now part of mainstream culture, with boutique gyms, cycling studios and yoga classes everywhere around us.
The fitness and mind-body industry was worth $542 billion in 2015, according to the Global Wellness Institute. Lululemon Athletica founder Chip Wilson now ranks among the world’s 500 richest people, while start-up Peloton Interactive has scored a $4bn valuation thanks to the popularity of its internet-connected home-fitness equipment.
Mr Alessandri is a godfather of this new economy.
Thirty-five years after he built his first piece of equipment
– a hack-squat machine – his focus on fitness has made him a billionaire. His stake in Technogym, whose shares have surged 46 per cent in the past year, comprises about three quarters of his $1.3bn fortune, according to the Bloomberg Billionaires’ Index.
Mr Alessandri practices what he preaches. His own home is dotted with workout machines. Technogym’s Cesena campus, all curved roofs and wood interiors – plus a small army of robotic lawnmowers – is a cathedral to this vision.
It certainly stands out from the fields of peach trees and warehouses that mark the drive from Bologna. That is helpful because it’s also a marketing tool. More than 25,000 visitors pass through each year, touring the two-floor gym where 1,000 employees are encouraged to work out on its treadmills, stationary bikes and weight machines.
Mr Alessandri has a parent’s expectations for Technogym’s future. “I have two children and Technogym is the third,” he said. “The only things I want from my kids is health, growth and eternity.”
Anthony Bamford
Anthony Bamford, the Brexit-backing chairman of JCB Service, has rejoined the ranks of the planet’s 500 richest people as a global construction boom bolsters demand for his company’s excavation products.
Mr Bamford’s wealth rose $620 million (Dh2.27 billion) to $4.4bn after JCB released its 2017 results this week. Revenue for the world’s largest privately owned construction equipment maker grew 28 per cent from the previous year to £3.4bn (Dh16.32bn). The business, based in Rocester, England, paid a £60 million dividend to the Bamford family after skipping one the previous year.
Mr Bamford’s fortune makes him the world’s 417th richest, according to the Bloomberg Billionaires’ Index. The 72-year-old last appeared on the list in June. JCB’s results mark its largest revenue growth in five years and outstrip the global construction equipment market’s expected 4 per cent expansion rate through to 2024. Rising government funding for infrastructure projects and “rapid” urbanisation across countries including China, Brazil and India underpin this growth.
In June 2016, Mr Bamford
wrote to JCB’s UK staff and criticised the European Union’s “unaccountable” leaders before informing employees he would vote to leave in the referendum that month.
The company’s growth since the EU referendum contrasts with Britain’s economic outlook. The British Chamber of Commerce cut its forecast this month, partly due to uncertainty related to Brexit.
While JCB continues to invest in the UK, it is taking an interest in its post-Brexit trade. Last month, JCB was part of a delegation accompanying Prime Minister Theresa May’s trip to boost relations with South Africa, Nigeria and Kenya.
Rinat Akhmetov
Rinat Akhmetov has survived revolution, war and nationalisation of assets. His fortune has dropped almost four times from its highest in 2013 after a revolution in Ukraine erupted into conflict with Russia and the annexation of Crimea.
Yet he continues to be Ukraine’s richest person and the 52-year-old is even making a comeback with a fortune of $5.9bn, according to the Bloomberg Billionaires’ Index.
Mr Akhmetov owns System Capital Management, the country’s largest industrial conglomerate, whose most valuable assets are steel company Metinvest, and coal and energy business DTEK. Both had enterprises in Lugansk and Donetsk regions, where an uprising of pro-Russian rebels occurred after mass protests in early 2014.
Mr Akhmetov was forced to move from his native Donetsk to Kiev and his wealth slid from a high of $22.4bn in January 2013.
In 2017, Metinvest and DTEK assets in Lugansk and Donetsk were nationalised by pro-Russian rebels after Ukraine’s military veterans started a transport blockade of its rebel-held eastern regions. Mr Akhmetov stayed afloat and Metinvest reported stronger first-half 2018 financial results compared with a year earlier.
DTEK’s coal production decreased 12.9 per cent during the same period. However, efforts to convert some of its power units from anthracite hard coal are showing results and allowing the holding to decrease its coal import needs.
Kevin Systrom
While he took time off for paternity leave this month, Instagram’s Kevin Systrom had time to reflect on all the small ways Facebook had started to impose its will on the photo-sharing app he co-founded.
Earlier this year, his parent company asked for prompts within Instagram that would drive traffic and add content to its main social network. Meanwhile, Facebook removed some of the links to download Instagram from the Facebook app. Facebook also wanted more influence over Instagram’s functions such as ad sales.
Then in July, chief executive Mark Zuckerberg seemed to take credit for Instagram’s success on the company’s earnings call.
Mr Systrom and his co-founder, Mike Krieger, spent six years running Instagram as a division of Facebook, while pursuing their own vision for the app. When Mr Systrom returned from leave last week, he and Mr Krieger announced that they were leaving the social media giant.
“Building new things requires that we step back, understand what inspires us and match that with what the world needs,” Mr Systrom wrote, without mentioning Mr Zuckerberg. “We look forward to watching what these innovative and extraordinary companies do next.”
He used the plural – “companies” – even though without him and Mr Krieger, Instagram should start to become less of a separate entity. The founders’ exit clears the way for Mr Zuckerberg to achieve his vision for cross-promotion among what he calls a “family of apps,” the group encompassing Facebook, WhatsApp, Instagram and Messenger.
David Siegel and John Overdeck
Billionaires David Siegel and John Overdeck are reviving a little-known asset-backed security that boosts potential risks and rewards of investing in private equity funds.
The duo, co-chairmen of the $52bn hedge fund Two Sigma, are using a collateralised fund obligation at Sightway Capital, which invests part of their fortune. The CFO raised $216m through a securitised note sale last month. The notes will be repaid by the cash flows from stakes in 32 private equity funds.
The CFO adds leverage to Sightway’s private equity fund holdings, increasing the volatility while freeing up cash for other investments.
“It’s the same thing that leverage has done since Egyptian times,” says Franklin Rudd, a partner at Compass Partners International, a private equity investor. “It takes an asset that people assume is low risk because it’s diversified and allows you to borrow against it.”
Wray Thorn, Sightway’s chief investment officer, said his company anticipated the possibility of such a slump. Sightway relied on mathematical models and other technology developed at Two Sigma to better understand how the securitised bonds would perform in a market downturn. The results helped the notes earn an A rating from Fitch.
“This is a great example of how you can use data science and modelling techniques to innovate the way private equity is done,” Mr Thorn says.