It’s Russian roulette for rich investors

This is shaping up as a “lost year” for Australia’s richest sharemarket investors.

In the last 12 months, 10 of the 15 members of this elite club – including Frank Lowy, Gerry Harvey, Chris Morris and John Grill – have watched the value of their investments fall or perform worse than the 10-year bond rate, known as the risk-free rate of return.

In the majority of cases, the patchy state of Australia’s economic recovery and the worrying state of the global environment has led investors to turn their backs on these entrepreneurs.

But a handful of winners – including Andrew Forrest and James Packer – suggest better times are ahead.

Australia’s super investor club focuses on the 15 entrepreneurs with the largest sharemarket portfolios.

In most cases, their shareholdings are associated with one company but a few – including Packer, healthcare a and media billionaire Paul Ramsay and gaming machine veteran Len Ainsworth – have portfolios spread over two or more companies.

The biggest loser in both dollar and percentage term is Chinese-based entrepreneur Shi Zhengrong, who is the founder of US-listed solar company Suntech Power. The former University of New South Wales student continues to tumble down the world’s rich lists. Just four years ago, BRW Magazine estimated his fortune at $3 billion, but in the last 12 months the value of his shareholding has fallen by almost 38%, as cheap Chinese solar panels caused huge problems for solar entrepreneurs.

Another entrepreneur hit by global forces is John Grill, the chief executive of engineering giant WorleyParsons. The company’s share price has fallen more than 26% in the last 12 months, wiping almost $250 million off the value of Grill’s stake. As the second coming of the mining boom kicks off in earnest, WorleyParsons will be well placed to benefit, but for now Grill’s membership of the billionaire’s club has been suspended.

The men behind Harvey Norman, retail veterans Gerry Harvey and Ian Norman, have also had a rough 12 months, with sagging consumer confidence weighing heavily on Harvey Norman’s share price. The value of Gerry Harvey’s stake has fallen by a touch over $155 million, although he retains billionaire status. Harvey Norman’s share price had held up reasonably well during the GFC, but investors will be watching consumer confidence carefully over the next six to 12 months.

Shopping centre moguls Frank Lowy and John Gandel have seen their respective shares in Westfield Group and CFS Retail Property Trust rise, but by less than the risk free rate of return (currently a touch over 4.8%). Like Harvey and Norman, they will probably need to wait until consumer wallets open again before they will receive more investor support.

Not every retailer has fared poorly, however – Reg Rowe, the founder of discount retailer Super Cheap Auto is an exception. The company, which owns the Super Cheap chain and the speciality chain Boating, Camping & Fishing is one of the real success stories of the retail sector, bridging trends towards discount retail, home improvement and leisure spending. Thanks to its strong performance, Rowe has enjoyed a brilliant year, watching the value of his stake jump 14.3% or $38 million to just over $300 million.

But the really big winner of the last 12 months has been billionaire Paul Ramsay, whose owns stakes in Ramsay Health Care and Prime Media Group. Ramsay’s media investment has been a perennial underperformer (its shares have dropped 75% in the last 12 months) but private hospital operator Ramsay Health Care has positioned itself brilliantly to take advantage of the ageing population in Australia and the European market, which it has recently entered.

The biggest winner from the past year is Andrew Forrest, who has seen the value of his stake in Fortescue Metals Group increase $603 million to $4.8 billion.

That means he is about $1.5 billion richer than James Packer, whose share portfolio includes casino giant Crown Holdings and media company Consolidated Media. Crown shares are up more than 8% in the last 12 months; that has helped boost his share-based wealth by $185 million to $3.3 billion.

The losses suffered by many of the 15 wealthiest investors should of course be seen in context – these are entrepreneurs who have built long-term businesses that have been through many economic cycles.

However, recovering the losses suffered during this “lost year” will take time, and a much more stable environment.