Super-rich step up big stock sales after global prices surge

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(Sept 16): Some of the world’s wealthiest people have sold more than US$3 billion of stakes in their major holdings since August, diversifying their fortunes as stock markets rebounded.

Knorr-Bremse AG IPO to generate US$4.5 billion for owner

Heinz Hermann Thiele (pictured) offloaded about US$1.2 billion in shares of Knorr-Bremse AG, the German brake manufacturer that underpins his fortune. Pieter van der Does and Arnout Schuijff, co-founders of Adyen NV, were part of a group of executives that sold stock in the Dutch payment firm worth US$821 million, while Steven and Mitchell Rales pocketed almost US$1 billion through Fortive Corp.

Volatility has picked up in recent weeks, with stocks halting a rebound that added as much as US$30 trillion in global market value since the turmoil brought on by the coronavirus pandemic. That’s prompted many investors to reassess the concentration of their wealth and take some money off the table. In the week ended Sept 11, insiders disclosed selling US$473 million of shares, while buying only about US$9.5 million.

“It’s the first time most people have lived through something as real, sharp and sudden as this,” said Claire Madden, managing partner of Connection Capital, a London-based private-equity firm whose investors include high-net-worth individuals. “It does make you reevaluate.”

Zuckerberg, Ortega

Most of the world’s biggest self-made fortunes are tied up in a single asset. Take Jeff Bezos: Inc. shares represent US$172 billion of his US$186 billion net worth. Mark Zuckerberg’s 13% stake in Facebook Inc makes up almost all of his US$103 billion wealth, while Amancio Ortega’s holding in Zara owner Inditex SA accounts for the bulk of his US$60 billion fortune, even with a US$17 billion property empire.

Malaysian billionaire Lim Kuang Sia, founder of Kossan Rubber Industries Bhd, also sold shares in late August, collecting more than US$30 million from a stake in the latex glove company that surged during the pandemic, before buying back a small portion last week. 

Lee Wai Keong of Riverstone Holdings Ltd, another glovemaker, raised US$45 million in a share placement earlier this month. Billionaire Leslie Wexner offloaded US$89 million of his L Brands Inc in August, highlighting a month in which stock sales from executives, board members and large shareholders in US-listed firms reached their highest levels this year.

“Stock-market valuations have climbed considerably, regardless of fundamentals,” said Seo Sang-young, an analyst at Kiwoom Securities Co in Seoul. “Volatility has been increasing.”

While some billionaires are selling stock, others are doing the opposite. Japan’s Masayoshi Son and French media magnate Patrick Drahi are looking into taking their companies private, after recent wild stock swings. Hong Kong real estate tycoon Peter Woo and the family behind Li & Fung Ltd, the world’s biggest supplier of consumer goods, are among those who took their firms out of the market spotlight earlier this year.

The sale by Thiele, who’s worth US$19.2 billion, will support his other investments, according to terms seen by Bloomberg, similar to the explanation given for a previous reduction of his majority stake in Knorr-Bremse this year. Adyen’s founders offloaded their shares to diversify their holdings and reduce single-stock risk, the company said in a statement.

The Rales, who spun out Fortive from Danaher Corp in 2016, didn’t disclose a reason for their sales. A Fortive representative didn’t respond to a request for comment.